FX.co ★ Technical Analysis of BTC/USD for January 23, 2024

BTC/USD Down -20% As Correction Continues

Key Takeaways:

1. Significant global investments could reshape Bitcoin's market dynamics.
2. BTC/USD is currently in a bearish phase, with key support and resistance levels identified.
3. Oversold RSI suggests a potential market pullback or reversal.

Global Investments Set to Reshape Bitcoin's Landscape

Recent developments indicate significant interest from the governments of Saudi Arabia and Qatar in Bitcoin. Plans to invest in Bitcoin, potentially on a scale comparable to Satoshi Nakamoto's holdings, could profoundly impact the market. This move, rumored to involve sovereign wealth funds purchasing around one million BTC, might outstrip previous large-scale investments by entities like BlackRock and MicroStrategy.

Saudi Arabia's changing stance on Bitcoin, coupled with Aramco's digital asset initiatives, and Qatar's unconfirmed reports of a $500 billion investment, signify a growing global trust in cryptocurrencies. The launch of Bitcoin ETFs in the US adds to this momentum, making the forthcoming weeks crucial for the crypto market.

Technical Market Outlook:

BTC/USD's recent trajectory has been turbulent, reaching a yearly high of $49,126 before a sharp downturn. A significant Pin Bar reversal candle on the weekly chart marked the start of a sell-off, leading to a 20% correction from the peak, with the last local low at $38,826. The pair now hovers near a key demand zone between $38,198 and $38,700.

The H4 chart shows weak and negative momentum, although the market has already hit extremely oversold conditions, suggesting a potential pullback. However, any upward movement seems capped, with resistance likely near $39,822 to $40,568.

Trend Analysis

The prevailing trend is bearish, as evidenced by the price's position below both the 100-period EMA and the 50-period DEMA. This suggests a continuing downward trajectory.

Support and Resistance

Key support is identified at the 'MIN' price of approximately $39,090.62. Resistance is anticipated near the EMA and DEMA levels, at $42,430.63 and $40,421.34, respectively.

Multiple 'Bearish Engulfing' patterns on the chart underline the prevailing bearish sentiment, while a 'Pin Bar Reversal Candle' at a significant support level could hint at a potential bullish reversal.

Indicator Insights

The RSI, deeply into oversold territory at 25.20, indicates that the market might be ripe for a reversal or pullback.

Intraday Technical Signals

• All 21 technical indicators on the 1H chart signal a sell.
• Similarly, all 18 moving averages suggest a sell.

Market Sentiment

The sentiment scoreboard shows a bullish inclination (69% bulls vs. 31% bears), albeit with a decreasing trend among Bitcoin traders.

Weekly Pivot Points

Pivot points, crucial for identifying potential market turning points, are as follows:

• WR3: $42,940
• WR2: $41,993
• WR1: $41,450
• Pivot: $41,046
• WS1: $40,503
• WS2: $40,100
• WS3: $39,153

Trading Insights:

The market's bearish phase suggests potential shorting opportunities at pullbacks to resistance levels. Investors might await more significant reversal signs before considering long positions. It's vital to factor in broader market contexts, including news and fundamental factors, alongside technical analysis. Proper risk management is essential.

The Bitcoin market is at a critical juncture, influenced by potential large-scale investments and current technical indicators. While the bearish trend prevails, oversold conditions signal possible market shifts. Traders and investors should remain informed and exercise prudent risk management in this volatile environment.

Useful Links

• More Artcles
• InstaForex Course for Beginners
• Open Trading Account

Important Notice

The begginers in forex trading need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp market fluctuations due to increased volatility. If you decide to trade during the news release, then always place stop orders to minimize losses.

Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. For successful trading, you need to have a clear trading plan and stay focues and disciplined. Spontaneous trading decision based on the current market situation is an inherently losing strategy for a scalper or daytrader.

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