Bitcoin hodlers have been busy derisking — even before the ETF launch — and the BTC price desperately needs a liquidity boost.
starts the fourth week of January in a precarious state as doubts surface over the cryptocurrency bull market.
BTC price action continues to struggle after hitting two-year highs — bulls are on the back seat, and $40,000 support is looming ever closer.
What could be in store next?
With the drama around the launch of the United States first spot Bitcoin exchange-traded funds
(ETFs) now gone, analysts are asking themselves that question first and foremost.
Potential catalysts for volatility are lining up in the weeks and months ahead — but their impact on Bitcoin itself is the real area of interest.
That said, the coming week marks something of a “calm before the storm” — macroeconomic shifts come in the form of the Federal Reserve interest rate decision on Jan.
31, while the final countdown to Bitcoin’s next block subsidy halving has yet to commence.
The battle for BTC price support is nonetheless raging, with BTC/USD already down nearly 20% versus the highs.
Cointelegraph takes a closer look at the current landscape with insights from popular market participants into where Bitcoin might be headed.
Bitcoin traders eye sub-$40,000 levels for longs
Another disappointing weekly close for Bitcoin — this time, its lowest in over a month,
data from Cointelegraph Markets Pro and TradingView shows.
A final push higher brought $41,700 back into play, but this failed to stick as downside totaling $1,000 preceded the close.
At the time of writing, BTC/USD is attempting to hold the $41,000 mark.
Analyzing the situation overnight, popular trader Skew noted bid support at $40,500 and below — liquidity which ultimately buoyed the market.
“Bid depth thickens a lot beneath those as well ~ strong demand for BTC,” part of commentary on X (formerly Twitter) read.
An accompanying chart showed BTC/USDT order book liquidity for largest global exchange Binance.
A breakdown through $40,000 is nonetheless on the cards for various traders at present.
As bid interest likewise stacks up above $35,000, that area is becoming a popular choice for potential long BTC positions.
Others noted the significance of the current BTC price zone, with Skew calling it “pretty important on a 12H/1D close basis.”
“Bitcoin is testing the $40,000 – $41,200 area again that has been tested multiple times the past 2
months,” trading suite Decentrader continued on the day.
Decentrader noted that one of its proprietary trading tools composed of a basket of popular indicators is now turning bullish.
“Will this area continue to hold up price?” it queried.