Do you expect BTC below $40k? 5 things to know in Bitcoin this week
Bitcoin (BTC) will launch in the fourth week of January.
BTC price action continues to struggle after hitting two-year highs – bulls are in the back seat, and $40,000 support is very close.
What can be stored next?
With the United States' top spot for bitcoin exchange-traded funds (ETFs) now gone, analysts are asking themselves this question first.
Possible reasons for the volatility will line up in the coming weeks and months – but their impact on Bitcoin is a real area of interest.
That said, the coming week will present something of a “calm before the storm” – macroeconomic changes will come in the form of the Federal Reserve's interest rate decision on January 31, the last countdown to Bitcoin's next block subsidy halving yet to begin.
With BTC/USD already down nearly 20% from its highs, the battle for BTC price support is raging.
Cointelegraph takes an in-depth look at the current landscape with insights from prominent market participants on where Bitcoin may be headed.
Bitcoin traders are looking at levels below $40,000 for a long time
Another disappointing weekly close is in store for Bitcoin — this time, it's the lowest in more than a month, according to data from Cointelegraph Markets Pro and TradingView.
A final push brought $41,700 back into play, but that was a $1,000 drop from the total before the close, so it didn't last.
At the time of writing, BTC/USD is trying to hold the $41,000 mark.
Analyzing the situation overnight, popular trader Skew found bid support at $40,500 and below – liquidity finally buying the market.
A comment section on X (formerly Twitter) said: “The bidding depth will be much lower than those and the demand for BTC will increase.
The accompanying chart shows the BTC/USDT order book for the largest international exchange, Binance.
A crash at $40,000 is currently on the cards for various traders. As bid interest rises above $35,000, that area is becoming a popular choice for long BTC positions.
$BTC
Rest assured, same thoughts as a week ago. Interested in low 39k. pic.twitter.com/PhKfU3STHY
— Crypto Chase (@Crypto_Chase) January 22, 2024
$BTC / $USD – Update
Bring me $38,000 at once, written by the stars pic.twitter.com/qOcJ2ZqBT2
— CryptoTony (@CryptoTony__) January 22, 2024
Others pointed to the importance of the current BTC price zone, with Skew calling it “very important at the 12H/1D close.”
“Bitcoin is retesting the $40,000-$41,200 range that it has tested several times over the past 2 months,” trading suite Decentrader continued on the day.
Decentrader has revealed that one of its proprietary trading tools, consisting of a basket of popular indicators, is now turning bullish.
“Will this area continue to hold value?” he asked.
GDP, PCE lead macro week ahead of Fed.
The coming week will see some key US macroeconomic data releases during the Fed blackout period.
Their impact may be limited when the Federal Open Market Committee, or FOMC, decides to raise interest rates at its upcoming meeting on January 31.
Preliminary Q4 GDP is due out and Jan. 26 will see the personal consumption expenditures (PCE) index for December — the Fed's preferred measure of inflation.
The outlook for inflation is mixed – stocks are pushing all-time highs and markets are betting on a rate cut, but recent data releases have seen prices rise more than expected.
“Just as stocks are pushing to higher territory, we have a lot of important events going into February,” wrote trading resource Kobeisi Letter in a weekly diary summary.
Key events this week:
1. Production of PMI data – Wednesday
2. Core durable goods orders – Thursday
3. Q4 2023 GDP data – Thursday
4. New home sales data – Thursday
5. December PCE inflation data – Fri
6. ~20% of S&P 500 companies report earnings
We have completed 1 week…
— Kobeissi Letter (@KobeissiLetter) January 21, 2024
According to data from CME Group's FedWatch Tool, the odds of a rate hike next week stand at a unanimous 97.4% – no consensus on the Fed's curveballs.
Focusing on Bitcoin, the growing contradiction between BTC price action and equity is becoming hard to ignore.
For Arthur Hayes, former CEO of derivatives giant BitMEX, the writing is on the wall. Crypto markets need the return of global exchange – one of the results of the loosening of economic policy – to prosper, and this is perhaps in question, the party itself is standing.
“Y $SPX & $BTC Stop Rising Together After US BTC ETF Launch?” Asked for BTC/USD vs. S&P 500 comparison chart.
“Both love is more $liq, which one is right about the future? $BTC is telling us that there are obstacles ahead in $liq, the next sign post is the US Treasury return on January 31st.”
Hayes cited another key event on the sidelines of the FOMC that will point the way for U.S. liquidity conditions going forward.
Scaramucci sees delay in ETF purchases
While BTC's price strength may not mimic the bullish narrative that was popular before the ETF's launch, long-term market participants are calling for patience.
As reported by Cointelegraph, deviations from the market's post-production shifts mean that sell-side pressure has been given since the start of trading on January 11.
At the center of the recovery is Grayscale Bitcoin Trust (GBTC), now an ETF itself, with investors seeing its share price practically match the bitcoin spot price.
Data from statistical data source Bitcoin Treasuries confirms that GBTC holdings have decreased significantly this month – by about 100,000 BTC.
GBTC investors may want to turn to other ETF products for more lucrative terms. From Yahoo! In an interview with last week's World Economic Forum in Davos, Switzerland, Anthony Scaramucci, partner and founder of SkyBridge Capital Management, said regulations around this are likely to reduce ETF revenues.
“You have a lot of investors who got into the Grayscale Bitcoin Trust at 2% — they bought bitcoin at $50,000, $60,000, $69,000 — and when the ETF became available, they were able to sell the Grayscale Bitcoin Trust for tax loss purposes,” he explained.
Scaramucci cited a 30-day cooling-off period after a sale before investors could enter the same product, which provided a “great arbitrage” opportunity.
“It can reach a peak in buying within 30 days after the sale,” said Adam Back, CEO of the Bitcoin technology company Blockstream.
Back, known for his bullish view on Bitcoin at the moment, has already mentioned the size of the ETF's flow and its importance to the market.
These are 30 times more than the amount of supplies received in each half event that day.
“And a lot of tradfis driven by broker sentiment are quick buyers: the price goes up because of the smart money, they say buy, they make news, they say they buy more.”
Fact: Bitcoin will start making profits at the end of 2023.
Bitcoin is seeing one of the longest bullish periods in its history – even though its price is below all-time highs.
On-chain data uploaded to X by James Van Straten, a research and data analyst at CryptoSlate, shows Glasnode making a strong three-month profit.
“This was covered by the 2021 bull run that started in September 2020 and ended in February 2021 (155 days),” he commented.
‘I think this trend will end soon, Bitcoin will stay around $40,000.
The data feeds the idea that the current buying and selling volatility may be a knee-jerk reaction to ETF launches.
As Cointelegraph reports, that event triggered a sell-off above $49,000, indicating a mass market exit from short-term holders selling BTC at a loss.
The whales that are in focus as the distribution
Crypto is still greedy, even close to 20% below the post-ETF top.
RELATED: BTC Price Recovers From $40.3K Lows ‘Cut Down' By Bitcoin Volatility
This is a summary of data from Sentiment Gauge, Crypto Fear and Greed, which shows that the average crypto investor does not feel fear when it comes to market volatility.
As of January 21st, Fear and Greed measured 55/100 – still in the “Greed” bracket, having moved into “Neutral” territory.
January 11 saw highs of 76/100 – not “extreme” by metric standards, but similar to the sentiment when BTC/USD reached its current all-time high in November 2021.
The numbers coincide with changes in exposure among Bitcoin investors.
According to the wise advice of a popular crypto instructor, whales are selling off, and other large entities have reduced their holdings.
Regarding wallets with between 10 BTC and 10,000 BTC for X registrants, they “currently hold the minimum amount from June 2023, which indicates a sale or distribution,” he said.
Data from the Sentiment Company predicted that the stock among the whales would rebound.
Earlier, Cointelegraph reported on a theory suggesting that a major bearer of the 2021 bull market has driven distribution trends.
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
