Bitcoin Misery Worsens: King Crypto’s Worst Week Has Investors Shivering Near $35,000

Christian Encila

Last Updated: January 15, 2024 7:18 am

3 mins read

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The Bitcoin market is experiencing a period of adjustment following the much-anticipated launch of US spot ETFs last week. After a surge to a two-year high near $49,000, the leading cryptocurrency has pulled back over the past four days, currently trading at $42,588 with a market capitalization of $834 billion.

This correction presents an opportunity to assess the underlying dynamics and potential future trajectories of the digital asset.

ETF Approval Hype Fades: Markets React

The initial excitement surrounding the ETF approval was palpable, fueling a rapid price increase as investors anticipated increased accessibility and institutional adoption. However, profit-taking and market uncertainty quickly set in, pushing the price back down closer to pre-ETF levels.

This pattern aligns with the “buy the rumor, sell the fact” phenomenon often observed in financial markets, highlighting the distinction between anticipation and actualization.

Adding to the selling pressure are recent outflows from the Grayscale Bitcoin Trust. The massive fund, previously trading at a discount due to its closed-ended structure, converted into an ETF last week.

However, some investors opted to redeem their shares instead of transitioning to the new structure, resulting in a net outflow of $579 million. This suggests that liquidity considerations and potential portfolio adjustments played a role in the post-ETF price movement.

Bitcoin currently trading at $42,619 on the daily chart: TradingView.com

Furthermore, the activity of Bitcoin miners, the decentralized network responsible for validating transactions and generating new coins, presents another factor to consider. The Bitcoin Miners’ Position Index (MPI) spiked to 9.43 on January 12, indicating a significant increase in Bitcoin movement by miners.

While the exact reasons for this activity remain unclear, it could potentially signal profit-taking by miners who wish to capitalize on the recent price appreciation.

Despite the recent correction, analysts remain divided on the short-term and long-term prospects for Bitcoin. Ali Martinez, a prominent crypto analyst, identifies a “parallel channel” pattern in the price chart, suggesting a potential retracement to $35,000 before a potential rebound towards $50,000.

However, Martinez also acknowledges the risk of further downside pressure if miners continue to sell their holdings.

Source: Ali Martinez

Bitcoin Outlook: Analysts Cautious Amid Complexity

Tony Sycamore, another market analyst, takes a more conservative approach, anticipating range-bound trading between $38,000 and $40,000 in the near future. Both analysts emphasize the importance of monitoring miner activity and investor sentiment in the coming weeks, as these factors will play a crucial role in determining the next directional move for Bitcoin.

Ultimately, the recent market dynamics highlight the complexity of the Bitcoin ecosystem. While the ETF launch represents a significant milestone for institutional adoption, it is not a guaranteed catalyst for immediate price appreciation.

The Crypto Fear and Greed Index drops to its lowest level in three months. Source: Alternative.me

Meanwhile, just a few days after the historic approval of spot Bitcoin ETFs in the US, the Crypto Fear and Greed Index has dropped back to “neutral” levels, last seen in October 2023.

The indicator shows that the current market sentiment score for Bitcoin is 52 out of 100, which is the lowest since October 19 of last year, when the price of Bitcoin was trading for about $31,000 on a daily average.

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Christian Encila

They say journalists never truly clock out. But for Christian, that's not just a metaphor, it's a lifestyle. By day, he navigates the ever-shifting tides of the cryptocurrency market, wielding words like a seasoned editor and crafting articles that decipher the jargon for the masses. When the PC goes on hibernate mode, however, his pursuits take a more mechanical (and sometimes philosophical) turn.

Christian's journey with the written word began long before the age of Bitcoin. In the hallowed halls of academia, he honed his craft as a feature writer for his college paper. This early love for storytelling paved the way for a successful stint as an editor at a data engineering firm, where his first-month essay win funded a months-long supply of doggie and kitty treats – a testament to his dedication to his furry companions (more on that later).

Christian then roamed the world of journalism, working at newspapers in Canada and even South Korea. He finally settled down at a local news giant in his hometown in the Philippines for a decade, becoming a total news junkie. But then, something new caught his eye: cryptocurrency. It was like a treasure hunt mixed with storytelling - right up his alley!

So, he landed a killer gig at NewsBTC, where he's one of the go-to guys for all things crypto. He breaks down this confusing stuff into bite-sized pieces, making it easy for anyone to understand (he salutes his management team for teaching him this skill).

Think Christian's all work and no play? Not a chance! When he's not at his computer, you'll find him indulging his passion for motorbikes. A true gearhead, Christian loves tinkering with his bike and savoring the joy of the open road on his 320-cc Yamaha R3. Once a speed demon who hit 120mph (a feat he vowed never to repeat), he now prefers leisurely rides along the coast, enjoying the wind in his thinning hair.

Speaking of chill, Christian's got a crew of furry friends waiting for him at home. Two cats and a dog. He swears cats are way smarter than dogs (sorry, Grizzly), but he adores them all anyway. Apparently, watching his pets just chillin’ helps him analyze and write meticulously formatted articles even better.

Here's the thing about this guy: He works a lot, but he keeps himself fueled by enough coffee to make it through the day - and some seriously delicious (Filipino) food. He says a delectable meal is the secret ingredient to a killer article. And after a long day of crypto crusading, he unwinds with some rum (mixed with milk) while watching slapstick movies.

Looking ahead, Christian sees a bright future with NewsBTC. He says he sees himself privileged to be part of an awesome organization, sharing his expertise and passion with a community he values, and fellow editors - and bosses - he deeply respects.

So, the next time you tread into the world of cryptocurrency, remember the man behind the words – the crypto crusader, the grease monkey, and the feline philosopher, all rolled into one.

Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.