Bitcoin price eyes comeback above $40,000, traders unsure of where BTC is headed next
- Bitcoin price made a comeback above $40,000 on Thursday, eyeing gains after the recent correction.
- Bitcoin’s long term holders sent over $430 million in Bitcoin to exchanges as BTC dipped below $39,000.
- Santiment experts believe that it is the ideal time to take a contrarian position in Bitcoin, as volatility prevails in cryptocurrencies.
Bitcoin price suffered a setback after hitting its two year high of $48,989 on January 11. The asset dropped to its 2024 low of $38,555 on Tuesday before beginning its recovery to the psychologically important level of $40,000.
The approval of Bitcoin Spot ETFs by the Securities and Exchange Commission (SEC), ushered a volatility in crypto prices, and divided traders on their sentiment on BTC.
Santiment experts recommend taking a contrarian stance to benefit from the shifting Bitcoin price trend.
Daily Digest Market Movers: Bitcoin traders divided on their sentiment on Bitcoin price
- On-chain intelligence tracker Santiment identified that the sentiment among Bitcoin traders on Telegram, Reddit, X and 4Chan is divided.
- BTC traders on Telegram and X became excessively bearish before Bitcoin price dip, on Reddit and 4Chan it was the opposite.
Bitcoin sentiment among BTC traders. Source: Santiment
- Glassnode data reveals that Bitcoin’s current price action mirrors prior bull runs, between 2015 and 2018, 2018 and 2022. BTC price climbed from its market bottom and based on data from the chart below, the next market peak could arrive in October 2025.
Bitcoin price performance since cycle low. Source: Glassnode
- Bitcoin’s long term holders sent over $430 million worth of BTC at a loss to exchanges on January 22 on the day when BTC declined below $39,000. Glassnode data shows that BTC is going through capitulation and a breakout in the asset is closer.
Bitcoin Transfer Volume from Long-term holders. Source: Glassnode
Technical Analysis: Bitcoin price eyes recovery
Bitcoin made a comeback above the $40,000 mark on Thursday. BTC price has faced volatility since the ETF approval by the SEC. In the two weeks following the approval, Bitcoin price has declined, and traded sideways below the psychologically important $40,000 mark.
Bitcoin price is likely to make a comeback to $41,466, a key resistance level for BTC, as seen in the chart below.
BTC/USDT 1-day chart
In the event of further decline in Bitcoin, the asset could find support between $38,197 and $39,026, a zone where 549,410 addresses scooped up 266,390 BTC.
Cryptocurrency prices FAQs
How do new token launches or listings affect cryptocurrency prices?
Token launches like Arbitrum’s ARB airdrop and Optimism OP influence demand and adoption among market participants. Listings on crypto exchanges deepen the liquidity for an asset and add new participants to an asset’s network. This is typically bullish for a digital asset.
How do hacks affect cryptocurrency prices?
A hack is an event in which an attacker captures a large volume of the asset from a DeFi bridge or hot wallet of an exchange or any other crypto platform via exploits, bugs or other methods. The exploiter then transfers these tokens out of the exchange platforms to ultimately sell or swap the assets for other cryptocurrencies or stablecoins. Such events often involve an en masse panic triggering a sell-off in the affected assets.
How do macroeconomic releases and events affect cryptocurrency prices?
Macroeconomic events like the US Federal Reserve’s decision on interest rates influence risk assets like Bitcoin, mainly through the direct impact they have on the US Dollar. An increase in interest rate typically negatively influences Bitcoin and altcoin prices, and vice versa. If the US Dollar index declines, risk assets and associated leverage for trading gets cheaper, in turn driving crypto prices higher.
How do major crypto upgrades like halvings, hard forks affect cryptocurrency prices?
Halvings are typically considered bullish events as they slash the block reward in half for miners, constricting the supply of the asset. At consistent demand if the supply reduces, the asset’s price climbs. This has been observed in Bitcoin and Litecoin.
Author
Ekta Mourya
FXStreet
Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.
