Bitcoin’s price has come down completely after exploding to around $ 38,000 in the past 24 hours. BTC initially rose after Tesla CEO Elon Musk put the word „Bitcoin“ in his Twitter bio.
Since then, BTC has dropped back to around $ 33,000 and has leveled off just under $ 34,000 in the past few hours.
Will Bitcoin Recover Soon?
After falling from $ 38,000 to $ 33,000, Bitcoin has consolidated with no real direction, either up or down.
“I think there is a decent chance that BTC will go up again by the weekend. Hourly it looks like accumulation. I have unhedged / bought back some positions here. Stay away from derivatives for now that weekends can get chopped off. “
Another pseudonymous trader known as „DonAlt“ also states that Bitcoin could see a big move up if it moves above $ 34,000.
“Bull side momentum plays were completely washed out when Elon Musk’s organic switch didn’t work, and then bear side continuation plays were chopped off. I watch the span below (green zones), every approach through the borders and I would expect a considerable jump. “
However, until Bitcoin sees a clear breakout above the short-term resistance level, analysts expect further consolidation.
Longer term, analysts say Bitcoin is on the way to seeing a medium-term uptrend. Zoran Kole, a Bitcoin trader and technical analyst, explains:
„Haven’t updated this in a few weeks. $ BTC HTF thesis. Zoom out. Everything will be fine anon. “
Why BTC is stagnating
Before the initial rally to $ 38,000 took place, there was a clash of many on-chain indicators showing a more bearish trend.
The pressure to sell from the miners increased and the whales deposited a lot of BTC on the exchanges. The combination of the two factors meant that external selling pressure on Bitcoin was high.
This could have been why Bitcoin was likely rejected from the resistance level at $ 38,000. Many traders believe that Bitcoin would have to recapture $ 38,000 to confirm a bullish short-term trend reversal.
Although Bitcoin briefly surged above $ 38,000, it struggled to stay stable above it. Therefore, BTC was prone to a quick correction as it saw a rapid surge up into the $ 38,000 area.
Within a few hours, BTC regressed completely and fell below $ 33,000 at the daily low on January 30th.
In the foreseeable future, there is a high probability that Bitcoin (For instructions on how to buy Bitcoin ) will consolidate with low volatility. This would likely result in Altcoins and DeFi tokens seeing high volatility and significant upside potential.
In the meantime, the key could be the influx of stablecoin deposits into cryptocurrency exchanges, which could signal the ingress of outsourced capital.