Sentiments of the cryptocurrency market are a little less optimistic today, and it seems that the largest cryptocurrency is facing a test of momentum. Bitcoin's price falling despite strong ETF demand may signal, that long term addresses are selling Bitcoins at this point, with higher pace amid recent rebound from $92k to $102k.
- Bitcoin's price retreated sharply below $101,000 today and is close to testing the EMA50 (orange line) at $100,500. Recent positive market sentiment has also been fuelled to some extent by the possibility of a pro-Bitcoin candidate in Canada, Pierre Poilievre, coming to power and possibly replacing the outgoing Justin Trudeau
- As of December 2024, ETFs had accumulated more than 51,500 BTC against less than 14,000 produced by Bitcoin miners. BTC stocks on exchanges have also fallen significantly, setting the stage for a rebound if demand for exchange-traded funds in the United States continues.
- Recent data on BTC inflows have been performing strongly, with more than 900 million net inflows on January 3 and BTC purchases worth nearly $911 million yesterday, January 6. Wall Street sentiment and the dollar will be key to market sentiment. If the dollar's weakness continues and does not go hand in hand with declines in the indexes, bitcoin could further benefit from such a scenario.
Source: XTB Research, Bloomberg Finance L.P.
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A drop below $92,000 could indicate that Bitcoin is pursuing a bearish head-and-shoulders pattern scenario, with a potential downside range as low as $80,000. The nearest strong resistance is around the ATH at $110k. The EMA50 may provide important short-term support.
Source: xStation5
Bitcoin's historically reverted correlation with the US dollar seems relatively limited at this point. The cryptocurrency does not appear to be a direct beneficiary of either USD weakness or strength.
Source: xStation5
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