- Summary:
- Bitcoin price flashed red on Monday as it dropped by over USD 3,000 in hours, but there's more to it. We discuss what the week holds for BTC.
Bitcoin price swung wildly on Monday, hitting a three-day high of $95,845 before dropping by $3k hours later. The decline by BTC saw it drag the rest of the crypto market with it. The market’s capitalisation went down by more than $500 billion in 24 hours, underlining a strong bearish-leaning sentiment.
The upbeat case for BTC
According to CoinMarketCap, the market sentiment has declined sharply from a “Greed” rating of 60 to a “Fear” rating of 48 in the last seven days. However, with Donald Trump assuming office in the next week, a FUD sentiment is likely to be short-lived. Therefore, Bitcoin price will likely rebound in the coming days.
Trump’s assumption of office is seen as a potential inflection point for Bitcoin, thanks to his open support for cryptocurrencies. Also, many of his appointees are pro-crypto. For instance, his Treasury Secretary nominee Scott Bessent revealed that he owns approximately $500k worth of Bitcoin through BackRock ETF.
Further afield, South Korea lifted a ban on institutional trading in Bitcoin. That not only opens the pathway for an increased demand for the crypto coin, but also signals a realignment by foreign governments in readiness for a crypto policy shift in the United States.
Bitcoin Price Signals Weak Momentum
However, the current technical trends signal that BTC price will likely head downward in the near-term. First, the coin has recently broken below the Volume Weighted Moving Average (VWMA), which stands at $95,483 as of this writing.
Also, the crypto coin trades below the 20 and 50 Exponential Moving Average (EMA) level on the daily chart. The next critical level for Bitcoin price is $90,335, which has served as a support level for the last two months. Breaking below that level could potentially speed up the decline.
Also, Bitcoin’s ETF performance declined significantly in the last two sessions. According to data analysis site, SoSoValue, spot Bitcoin ETFs recorded net outflows of -$149 million and -$582 million on January 10th and 8th, respectively. A continuation of the trend could add downward pressure on Bitcoin price.
Bitcoin Price Prediction
Bitcoin price pivots at $93,010 and an extended resistance at that level will favour control by the sellers. Immediate support will likely be at $91,300, but an extended downward momentum could break below that level and test $90,300.
Conversely, moving above $93,010 will usher the buyers to take control. With that, BTCUSD will likely move higher to find the first resistance at $94,260. Also, breaking above that level will invalidate the downside narrative. Furthermore, it could strengthen the upside momentum and extend gains to test $95,800.
