Bitcoin has undergone heightened volatility after struggling to push past resistance around $40,000, resulting in over $305 million liquidated across crypto markets this week. However, Bitcoin bulls remain focused on major upside potential leading up to Bitcoin’s upcoming halving event in April 2024.
In the past 24 hours, the BTC price has attempted to reclaim footing above the key $40,000 support level following earlier selloffs. Increased volatility has led more crypto traders to buy up Bitcoin on dips in anticipation of the bull cycle many anticipate next year’s halving will initiate. Bitcoin is hovering in the range of $39,000, with major volatility in the last 24 hours.
Moreover, the U.S. approval of spot Bitcoin exchange-traded funds (ETFs) has fundamentally changed the crypto landscape. Demand for direct BTC exposure continues to rise across institutional and retail investors alike.
However, short-term headwinds persist. Recent days saw increased selling pressure from short-term holders, Bitcoin miners, and products like Grayscale’s GBTC Bitcoin Trust. Over $3.2 billion exited GBTC after the SEC approved spot BTC ETFs on January 10th as traders took profits.
Analysts predict Bitcoin support at $33,000
With the Bitcoin protocol set to reduce block rewards from 6.25 BTC to 3.125 BTC in 2024, analysts forecast BTC reaching $100,000 to $250,000 in the 1-2 years that follow as increased scarcity puts upward pressure on price. However, intermittent volatility is expected between now and halving day as the Fed plots interest rate policy shifts that could spark wider market risk-off sentiment if mishandled.
Notably, the recent golden cross between Bitcoin’s 50-day and 200-day moving averages typically indicates the end of broader bear markets. However, analyst Ali Martinez warns that $33,000 could be in play if the indicator fails to hold above $38,000 in the weeks ahead.
This key area combines several technical elements: the lower boundary of a parallel channel, the 0.5 Fibonacci retracement… pic.twitter.com/uaKmtMjdeQ
— Ali (@ali_charts) January 24, 2024
For now, the weekly relative strength index falling below 70 signals overbought conditions that leave BTC prone to a retest of the $30,000 area before regaining bullish momentum.