Key Levels to Monitor as Bitcoin Price Holds $40k
The Bitcoin Fear and Greed index indicates a return to greed at 55%. Corrections in the Bitcoin price above the 23.6% Fibonacci retracement level suggest a positive overall trend. The intraday trading volume in Bitcoin has seen a 101% gain, reaching $36.9 billion.
Following the launch of the Bitcoin ETF in the US market, BTC experienced a significant correction. After reaching a high of $49,000 on January 11th, the price dropped over 21% to a low of $38,540.
Although this downward movement initially indicated an ongoing correction trend, the price quickly rebounded above the $40,000 mark, suggesting a swift reversal.
On January 26th, BTC witnessed a significant inflow and reclaimed lost ground, resulting in a nearly $40 million liquidation of short positions.
Furthermore, on-chain data from Intotheblock shows that Bitcoin whales have been buying since the beginning of the year. Their BTC holdings have increased by approximately $3 billion or 76,000 BTC.
Bitcoin whales have increased their $BTC holdings by ~$3B (76,000 BTC) sine the start of this year. pic.twitter.com/0hi3Q7WXEo
— IntoTheBlock (@intotheblock) January 27, 2024
The current BTC price is $41,943. If it can sustain above $40,000, buyers may target immediate resistance at $43,560, which coincides with a 50% retracement of the recent decline.
A successful breakout from this level would signal increased conviction from buyers and could lead to a retest of $48,000.
Is Further Correction Possible?
If renewed selling pressure is seen at $43,560, the Bitcoin price may enter a sideways consolidation phase for one to two weeks. If this consolidation leads to a dip below the current low of $38,540, BTC could extend its correction to $35,600 and then $33,500.
- Exponential Moving Average: In the daily chart, the 100-day EMA serves as strong pullback support.
- Relative Strength Index: The daily RSI currently stands at 48%, reflecting a negative sentiment that has turned neutral.
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Hot Take: Bitcoin’s Recovery Sparks Market Relief
Bitcoin has managed to regain its position above the $40,000 psychological level, igniting a new relief rally in the market. This recovery has prompted major altcoins to follow suit. However, confirmation of a sustained recovery will come from Bitcoin’s ability to hold above the reclaimed level and potentially break out of the 50% Fibonacci retracement of the correction trend.
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