Bitcoin Price Prediction: Bitcoin, the largest cryptocurrency by market cap, experienced a sharp decline over the week, plunging from $49,000 to $40,300. This significant 17.8% decline may be related to the market’s concerns over the perception of the spot BTC ETF as a “sell-the-news” event, as well as Grayscale’s ongoing liquidation of its Bitcoin holdings.
During this decline, sellers managed to break the support trendline of the rising wedge pattern, suggesting that Bitcoin price may be set for another correction.
The reversal pattern signals a new corrective trend in action
- A rising wedge pattern formation reflects the maturity of a recovery phase.
- BTC price above the 38.2% and 50% Fibonacci retracement levels reflects that buyers have a firm grip on this asset.
- Bitcoin's intraday trading volume is $12.7 billion, a loss of 52%.
Bitcoin price| TradingView chart
The recent two-month recovery in Bitcoin price is marked by the emergence of a rising wedge pattern on the charts. Typically, this pattern signals a possible final push by buyers before the cryptocurrency undergoes a significant correction.
Furthermore, the disappointing performance of BTC price despite the launch of the First Spot BTC ETF has led to a sense of demotivation and concern among investors. As a result, Bitcoin experienced significant outflow on January 12, leading to a crucial break below the support of the wedge pattern.
This collapse caused the value of Bitcoin to fall to the 38.2% Fibonacci retracement level, with the price currently at $41.8.
If the selling pressure continues, there is a possibility that the cryptocurrency's value could decline by another 15% and potentially reach a local support level around $35,550.
Number of whales increases as Bitcoin price drops
While the short-term forecast for Bitcoin price appears pessimistic, on-chain activity shows a notable development that strengthens the optimistic outlook. Renowned cryptocurrency analyst Ali Martinez recently shared on the X platform that the number of large Bitcoin investors, commonly known as “whales,” has increased significantly. The tweet said:
Today marks a notable surge in #Bitcoin whales! The number of addresses with more than 1,000 $BTC has reached its highest level since August 2022 and is now at 1,510.
This increase in large #BTC holders could signal strong confidence or strategic positioning in the market.
In line with this development, if BTC value remains stable above the 50% Fibonacci retracement level around $37,200, it could significantly increase the likelihood of a robust recovery from buyers.
- Vortex display: A bearish crossover between the VI+ and VI- slopes reflects that the corrective trend is still in effect
- Exponential moving average: The coin price above the 100 and 200-day EMA suggests that the overall trend is bullish.
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