- While Bitcoin (BTC) tries to set the price at $ 34,000 as the support level, it is generally showing weakness. BTC seems to have stalled without any signs of a short-term relief rally, which causes investors to be cautious.
While Bitcoin (BTC) tries to set the price at $ 34,000 as the support level, it is generally showing weakness. BTC seems to have stalled without any signs of a short-term relief rally, which causes investors to be cautious.
One worrying trend, according to the article by analyst Joseph Young on Cointelegraph, is that Bitcoin volume stagnates with its price outside of the “Elon Musk pump” on January 29. This trend indicates a general decline in buyer demand since the $ 42,000 peak despite BTC’s rise.
Bitcoin started to fluctuate after $ 38,000
BTC rose to $ 38,461 on January 29, after Tesla CEO and richest man in the world, Elon Musk, apparently supported Bitcoin. However, before this rally, on-chain analysts were stating that Bitcoin’s momentum was slowing.
CryptoQuant’s CEO, Ki Young Ju, for example, identified the high selling pressure of Bitcoin miners as a sign of a short-term bearish scenario. Although the price of bitcoin increased by 14% for a short time, it fell back to $ 34,000 within 24 hours. Therefore, the weakening on-chain indicators were a possible warning that BTC would reclaim most of its “Elon pump” gains, according to the analyst.
Before the rally, Ki said:
“THE BORSA WALKING RATIO REACHED THE HIGHEST LEVEL OF EIGHT MONTHS. THIS MEANS THAT BTC CAN CREATE A LARGE RED CANDLE IF THE PRICE DROPS. IF THIS BULL RUN IS PROPER, IT MUST BE BELOW 85% OF THE MEASUREMENT. OTHERWISE, IT MAY BE A BULL TRAP. ”
When the price of bitcoin suddenly rose to the $ 38,000 resistance level, the whales selling it caused a sharp correction.
With weak over-chain indicators and selling pressure from miners, traders are cautious about opening long positions in the BTC / USD parity in the near term.
An anonymous trader known as “Salsa Tequila” said that he will not use leverage until Bitcoin breaks or drops to $ 30,000:
“WE ARE IN A POINT WHERE BTC IS MORE THAN $ 30,000 TO OPEN ANY LONG POSITION. BUT I DO NOT OPEN THE SHORT POSITION. THEREFORE, IT IS POSSIBLY BEST TO WAIT TILL MONDAY MORNING, UNTIL YOU HAVE A BIG DROP / RISE. NO LEVERAGE. ”
Meanwhile, another anonymous trader known as Byzantine General argues that the rally was broken. So even if Bitcoin is bullish in the macro picture, it is possible to face more disadvantages until it sees a convincing break in narrower time frames:
“I THINK THE BULL RUN IS STILL ON THE AGENDA, BUT THE RALLY IS BROKEN. WE CAN CONTINUE TO PUMP IF WE RECEIVE ANNUAL TIME-WEIGHTED AVERAGE PRICE (TWAP) AGAIN. BUT IT WOULD LOOK BORING TILL. ”
What to pay attention to
Traders and technical analysts are closely watching Bitcoin’s response to the $ 34,500 to $ 35,000 range, according to Joseph Young. If Bitcoin leaves this region with power, momentum and high volume; The probability of a short-term trend reversal increases. However, if Bitcoin struggles to retest the $ 34,5000 resistance level and continues to stagnate in the $ 33,000 zone; The risk of further breakouts towards the $ 33,000 support remains.
Crypto Fear and Greed Index
Additional signs that the BTC price may see another retracement include the Fear and Greed index, which remains at “extreme greed” levels, and “Bitcoin” searches on Google have dropped by 50% since the multi-year highs earlier this year.