Bitcoin’s price faces resistance at $40,000, having dropped 20% since the introduction of spot Bitcoin ETFs in the United States, with a recent dip to $38,000 on Jan. 23. Despite the setback, Bitcoin whales are seizing the opportunity to buy the dip, indicating potential optimism for a recovery above $40,000.
Several factors contribute to the positive sentiment among traders for a Bitcoin price rebound:
- Slowing GBTC Selling: The Grayscale Bitcoin Trust (GBTC) outflows, which previously impacted market momentum, have shown signs of decline in the last two days. This decrease in outflows suggests reduced selling pressure from long-trapped investors, possibly choosing lower-fee Bitcoin ETFs.
- On-Chain Data: On-chain data from Glassnode reveals that Bitcoin whales, entities holding 1,000 BTC or more, have actively increased their holdings despite recent market volatility. The number of such entities rose from 1,481 on Jan. 11, coinciding with the introduction of spot BTC ETFs, to 1,533 on Jan. 25, indicating a 3% increase.
- Technical Indicators: Bitcoin’s relative strength index (RSI) is rebounding from the oversold region, signaling a potential end to the recent pullback. The $40,000 level is crucial, and buyers are anticipated to vigorously defend it. To confirm a comeback, the price needs to surpass the 50-day EMA, and bullish momentum may strengthen beyond $44,700.
While Bitcoin faces challenges in reclaiming $40,000, the combination of slowing GBTC selling, positive on-chain data, and improving technical indicators provides a hopeful outlook for BTC bulls aiming for a recovery.
This information is not legal advice. Do your own research before making any decisions. Only invest what you can afford to lose and seek independent financial advice if needed. Understand the risks involved before purchasing any cryptoassets.