Is the BTC long position anticipating sub $40k? The answer to this is that Bitcoin hodlers have been actively reducing risk, even preceding the ETF launch, and the BTC price is in urgent need of increased liquidity. As the fourth week of January begins, Bitcoin faces a precarious situation with uncertainties emerging about the cryptocurrency bull market.
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BTC’s long position anticipating sub $40K
BTC’s price struggles persist after reaching two-year highs, with bulls taking a back seat and the $40,000 support level looming closer. The question now revolves around potential catalysts for volatility in the upcoming weeks and months, and how they might impact Bitcoin.
Despite the recent drama surrounding the launch of the United States’ first spot Bitcoin exchange-traded funds (ETFs), the focus remains on Bitcoin’s next moves. The current week is seen as a “calm before the storm,” with macroeconomic shifts, including the Federal Reserve interest rate decision on January 31 and the countdown to Bitcoin’s next block subsidy halving.
BTC/USD
The battle for BTC price support continues, with BTC/USD down nearly 20% from its recent highs. Traders are closely monitoring levels below $40,000, with bid support noted at $40,500 and below. The $40,000 – $41,200 range is deemed crucial, and there’s speculation about potential long BTC positions if the price drops below $40,000.
Macroeconomic Indicators
The upcoming week brings key U.S. macroeconomic data prints within the Fed blackout period, including the Federal Open Market Committee’s decision on interest rates. While some macroeconomic indicators are in play, the growing contrast between BTC price action and equities is becoming more evident.
Arthur Hayes suggests that global liquidity is crucial for crypto markets to thrive, and with uncertainties about economic policy, both $SPX and $BTC are showing signs of hesitation post the US BTC ETF launch.
Delay in ETF
Anthony Scaramucci notes a delay in ETF buying strength, with investors exiting Grayscale Bitcoin Trust (GBTC) and potentially waiting for a cooling-off period before reentering the market.
Bitcoin is experiencing a prolonged period of profit-taking, lasting for three months, and this dynamic may be linked to knee-jerk reactions following the ETF launch.
The focus on whales and larger entities reducing their holdings indicates a shift in investor sentiment, with potential accumulation among whales anticipated in the near future.
Overall, the current market landscape raises questions about Bitcoin’s reaction, with various factors contributing to the uncertainty in the cryptocurrency space.
Conclusion
To conclude, as Bitcoin’s longing position anticipating sub $40K and is facing uncertainties and potential downward pressure, hodlers’ risk reduction, combined with the impact of the ETF launch, highlights the need for increased liquidity. The intricate interplay of macroeconomic factors, BTC price dynamics, and investor sentiment underscores the evolving landscape, prompting questions about Bitcoin’s trajectory amid ongoing market fluctuations.
Note: It’s a research based article not a financial advice.
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