Bitcoin, the leading cryptocurrency, has managed to regain its position above the $40000 psychological level sparking a new relief rally in the market. While the major altcoins were quick to follow up on this recovery, the Bitcoin price suitability above the reclaimed level and potential breakout of 50% FIB of the correction trend will act as key confirmation for recovery.
Key Levels to Watch As Bitcoin Price Holds $40k
- The Bitcoin Fear and Greed index at 55% returns on Greed indication.
- Bitcoin price corrections above 23.6% FIB indicate the overall trend remains positive.
- The intraday trading volume in Bitcoin is $36.9 Billion, indicating a 101% gain.
Since the Bitcoin ETF launch in the US market, the underlying asset BTC has witnessed aggressive correction. From the January 11th high of $49000, the coin price plunged over 21% to hit a low of $38540.
Amid this downfall, the coin price dived below 23.6% Fibonacci retracement level and an ascending trendline which carrier recovery rallied for the past three months. Although this downward movement initially suggested an ongoing correction trend, the price didn’t sustain below the $40,000 mark, leading to a swift reversal.
On January 26th, the BTC witnessed a significant inflow and reclaimed the lost ground. This failed breakdown triggered a nearly $40 Million liquidation of short positions.
Moreover, a recent highlight from the on-chain data provider Intotheblock project the Bitcoin whales have been on a buying spree since the year began. Their $BTC holdings have surged by approx. $3B, a hefty addition of 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
Currently trading at $41943, if the BTC price manages to show sustainability above $40000, the buyers could target immediate resistance of $43560-concinding with a 50% retracement of the current downfall.
A successful breakout from this barrier will signal additional conviction from buyers to rechallenge $48000.
Is Further Correction Possible?
If the Bitcoin price witnessed renewed supply pressure at $43560, the BTC price may turn sideways for a week to two. In case, the consolidation leads to a dip below the current low of $38540, the BTC price may extend correction to $35600, followed by $33500.
- Exponential Moving Average: In the daily time frame chart, the 100-day EMA acts as strong pullback support.
- Relative Strength Index: A daily RSI of 48% reflects the negative sentiment that turns neutral.
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