Price analysis of Bitcoin: market sentiment turns neutral with BTC below $40,000 USD

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Yesterday, Bitcoin fell below $40,000, calming the spirits of crypto investors after the market was flooded with excitement following the approval of the first spot ETFs in the USA: here are the latest BTC price analyses.

Bitcoin falls below $40,000: the latest price analysis

Yesterday at 8pm Italian time, Bitcoin knocked on the door of $40,000, bringing its price below the fateful level, while the latest analysis signals a fertile ground for a bearish follow down.

Yesterday, BTC lost a total of 4.84%, dropping from 41,500 USD to 39,500 USD, with a trading volume of over 29 billion dollars in spot trading.

The violent session of strong sales has hit Bitcoin and the entire cryptocurrency market, it started at midnight on Monday, January 22nd when the orange coin lost the 50 EMA on a 1-hour time frame and recorded a downward trend acceleration.

analisi prezzo bitcoin usd

To tell the truth, the origin of the dump dates back to Thursday, January 11th, days when Bitcoin spot ETFs appeared on the stock exchanges in the United States, offering American investors a safe and regulated investment vehicle for trading the cryptoasset.

On that occasion, the price of BTC initially reached a local high of 48,900 USD, only to plummet and close the day at 46,700 USD.

The analysis of the following days’ trades clearly shows a predominantly bearish direction, with the majority of sales affecting outflows from the Grayscale Bitcoin Trust (GBTC).

The cryptocurrency investment fund is indeed the main protagonist of the price retracement at the beginning of the year, having liquidated an average of 16,000 BTC per day, reducing its holdings from 619,000 BTC to 536,000 BTC.

Anyway, unlike what is told by mainstream media, it is not Grayscale itself that is speculating on the cryptocurrency market by selling its assets, but it is the investors who previously opened positions through it that are proceeding with the liquidations.

The reasons in this regard may be partly related to a bearish bias that pushes them to press the “sell” button, and the desire to reduce the management costs of their ETF as Grayscale’s fees are extremely above the average of other fund managers.

Most of the sales of GBTC are indeed intended simply to change manager: all this does not change the outlook for Bitcoin ETFs, which see an increase in outflows compared to capital inflows.

Analysis of crypto market prices and sentiment

Trying to outline an analysis of the price of Bitcoin, which has recently dropped below $40,000, we can easily observe a current condition of weakness that is favoring bearish play.

After an extremely positive Q4 2023 for the entire cryptographic sector, with BTC growing by over 50%, it’s time to cash in on all the accumulated enthusiasm.

The “Supertrend” indicator, after a whopping 115 days, returns to trace a red trend in the Bitcoin chart, highlighting what could be the beginning of a prolonged bearish phase.

Compared to November 2023, we see a strong bearish divergence between the price of the crypto and the “Relative Strength Index” (RSI), which is simultaneously approaching oversold territory on the daily time frame.

The market volumes instead remain consistently high, without offering any particular clues about price action.

Although it is not easy to identify a support level for BTC now, we can imagine that if the demand does not make itself felt soon, we could easily visit the $36,000 before the market king decides the next move.

In case of recovery, the threshold of 44,000 USD will be the dividing line between the hopes of the bulls who dream of seeing a new all-time high this year, and the clutches of the bears who have tried to bring down the currency.

analisi prezzo bitcoin usd

On the market sentiment front, it is clear how all the euphoria of the past weeks is slowly fading away.

We have not yet reached a state of terror, but we could get there if the price of Bitcoin continues to decline relentlessly over the next few weeks.

By analyzing the data provided by Alternative.me’s “Fear and Greed Index,” we can observe how neutrality prevails at this precise moment.

However, we remind you that these data refer to yesterday’s day, so actually today the sentiment could be slightly more negative.

Anyway, we notice how last month the indicator showed a confidence and serenity value in the market of 71, while now we find ourselves at 50, at the mercy of the increasingly significant fluctuations of Bitcoin and other cryptocurrencies.

For the next few days, the analysis of BTC price and sentiment does not offer clear insights and does not provide information regarding a specific level to take positions, but it indicates with high probability that bidirectional volatility will continue, at least until the end of January.

Liquidations and open interest on Bitcoin

Since the analysis of Bitcoin price is quite inadequate to provide accurate forecasts, let’s focus on derivative markets and see what the indicators of open interest and liquidations suggest.

According to the data provided by Coinalyze, the open interest of Bitcoin, which is the sum of open derivative positions (short or long) on this crypto asset at the moment, is at 10.3 billion USD.

In the previous 50 trading days, this indicator has fluctuated between 11 billion USD and 12.5 billion USD, reaching today the lowest level.

This is not in itself a good sign: it indicates that interest in speculation is gradually diminishing, in a typical bear market scenario.

Anyway, it is still too early to draw conclusions, considering that the open interest is far higher than the values recorded in September 2023 when Bitcoin was priced at $25,000.

analisi prezzo bitcoin usd

As for the liquidation zones of traders in leverage, we can easily identify a price level that is crucial for the future price action of Bitcoin.

We are talking about the 42,000 USD, a key price zone where we notice the highest presence of potential liquidations for Bybit traders and also for other exchanges.

This means that if the price of Bitcoin were to rise above $42,000, we could witness a short squeeze that would send the crypto to a significantly higher level, likely around $45,000, before a new hypothetical rise.

In the coming days, it will be crucial to observe how the market king will react to the recent slip and monitor the indicators of derivative markets to understand how the situation will evolve.

Meanwhile, keep an eye on leverage because volatility is high and unpredictable at the moment.

analisi prezzo bitcoin usd