Bitcoin risks falling below $ 40,000 by the end of January

On the day the US regulator approved spot ETFs on bitcoin BTC $96,064.69 Bitcoin -1.23% Market capitalization $1.9 trillion VOL. 24 hours $2.38 billion , the price of the coin fell by 14%. This was reported by an AMBCrypto analyst citing data from CoinMarketCap. The drop in bitcoin was caused by a billion-dollar outflow of funds from the Grayscale Bitcoin Trust (GBTC).

According to CryptoQuant, almost 52,000 bitcoins have been redeemed from the trust over the past four days, which amounts to approximately $ 2.1 billion. Although experts call this a reallocation of funds in favor of cheaper spot ETFs, it is possible that many GBTC shareholders have been making money on bitcoins that they were previously denied access to.

The result is significant downward pressure on the bitcoin price. Thus, analysts from 10x Research predicted that the market leader could fall below $ 40 thousand by the end of January, with support at $ 38 thousand.

A look at the Coinbase premium index chart further confirmed the bearish outlook. Negative values indicated strong selling pressure from US investors.

AMBCrypto then turned to bitcoin’s technical indicators to assess its short-term prospects. The Relative Strength Index (RSI) was hovering below the neutral level of 50, which means that bears are in control.

The Moving Average Convergence Divergence (MACD) indicator [на графіку] was moving along negative territory, with the signal line remaining above the MACD line. In the absence of an immediate possibility of a bullish crossover, bears are likely to control the market.

According to Coinglass, over the past few days, the number of bearish short positions on bitcoin has exceeded the number of bullish long positions. This meant that most traders expected bitcoin to fall further in the coming days.

At the time of writing, the main cryptocurrency is trading at $ 41,024, which is 1.46% lower than yesterday. The total number of coins circulating on the market is $ 804.2 billion. Traders made daily trading deals worth $ 14 billion. BTC’s dominance in the market has reached 49.8%. The Fear and Greed Index remains at a pessimistic 56 points.