Bitcoin (BTC) has continued to experience a sell-off since the approval of a spot exchange-traded fund (ETF), failing to live up to the hype experienced before the approval.
In the wake of a regulatory nod for the product, Bitcoin retested the $49,000 mark, but the asset has corrected to currently trade above the $42,000 support zone.
The sell-off has resulted in Bitcoin losing $83.91 billion in market cap within five days of the approval. On January 10, the maiden cryptocurrency held a market cap of $915.71 billion, dropping almost 10% to reach $831.8 billion by press time.
Picks for you
Notably, the market cap briefly peaked at $954.6 billion on January 11 before the sell-off accelerated.
Indeed, the failure of Bitcoin to build on the ETF hype has resulted in questions regarding the need for such products.
What next for Bitcoin?
With a focus on the Bitcoin trajectory, trading expert AlanSantana, in a TradingView post on January 14, shared a glimpse of what to expect in the coming days. The analyst pointed out that Bitcoin had closed the weekly candle as an inverted hammer, a bearish candlestick pattern that, for validity, needs to appear at the top of a trend.
The signal was considered stronger with high volume and confirmation, leading the analyst to set the correction potential at around 95/96% probability.
In arriving at the correction probability, in a January 13 post, the expert explored the past Bitcoin performance, emphasizing a significant peak in December 2023, reminiscent of the bullish wave experienced in February 2021.
Santana highlighted key indicators such as the weekly Relative Strength Index (RSI) turning “overbought” with a rounded top or inverted cup pattern. He also highlighted a long-term lower high in December 2023 compared to January 2021, signaling potential weakness.
Bitcoin’s possible targets
Additionally, he outlined specific targets for Bitcoin during the bearish wave, including testing support levels at the weekly Exponential Moving Average (EMA) of 50 (around $32,000), weekly Moving Average of 200 (around $30,000), Exponential Moving Average of 200 (around $27,000), and Exponential Moving Average 300 (around $23,800). He also mentioned the possibility of a surprise move with a wick reaching $20,000.
“These are the target for the full duration of the bearish wave. The low can be a surprise hit and happen within 1 month, say à la early 2018 but the whole process can last between 2-4 months,” he added.
Despite the bearish outlook, Santana remained optimistic about opportunities, suggesting that this correction would lead to a favorable buy opportunity, potentially the last one of 2024.
Bitcoin price analysis
By press time, Bitcoin was trading at $42,319, having plunged by over 1% in the last 24 hours, while on the weekly chart, BTC is down 6%.
In the meantime, while the ETF was initially seen as a key catalyst for Bitcoin, attention has now shifted to the upcoming halving event—a historical bullish trigger for Bitcoin.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
