FX.co ★ Technical Analysis of BTC/USD for January 26, 2024

BTC/USD Volatility Decrease As Horizontal Trend Continues

Key Takeaways

1. Bitcoin's Volatility Drops: A sign of market stabilization, presenting a potential buying opportunity.
2. ETF Influence: The approval of Bitcoin-based spot ETFs has sparked significant market activity.
3. Technical Indicators: Current bearish phase with a focus on key resistance and support levels.

Crypto Industry Overview

Market Stabilization: A Positive Turn for Cryptocurrency

As the cryptocurrency market experiences a phase of stabilization, the community sees a promising horizon. The decline in Bitcoin's price is perceived as an opportune moment for acquisition, especially in anticipation of the upcoming Bitcoin halving in April. This event historically influences Bitcoin's value.

ETF Approval and Market Reaction

The eagerly awaited approval of Bitcoin-based spot ETFs by the SEC catalyzed market fluctuations. Following the approval, Bitcoin's value plunged from approximately USD 49,000 to under USD 40,000 within three weeks, a significant shift for investors and traders alike.

Technical Market Analysis

Current Market Position

The BTC/USD pair demonstrated a new yearly high at $49,126, followed by a swift decline. Currently, the market faces a correction of about 20% from this peak. The recent bounce from the key demand zone indicates a potential for a short-term bullish trend, yet the overall momentum remains weak and negative.

Indicator Insights

Most technical indicators signal a sell, aligning with the bearish trend. However, the presence of both bearish and bullish engulfing patterns suggests market indecision, highlighting the importance of closely monitoring these trends.

Sentiment Analysis

Traders' Outlook

The general sentiment leans towards bullishness, though recent data shows a decrease in optimism among Bitcoin traders. This fluctuation in trader sentiment is a critical factor to consider in market analysis.

Weekly Pivot Points

Pivot points offer valuable insights into potential market movements.

WR3 - $42,940

WR2 - $41,993

WR1 - $41,450

Weekly Pivot - $41,046

WS1 - $40,503

WS2 - $40,100

WS3 - $39,153

Trading Insights

Bullish Scenario

• Expectation: Consolidation above the DEMA 50.
• Objective: Breach the 100 EMA, aiming for higher resistance levels.
• Risk: Failure to surpass the 100 EMA may dampen bullish momentum.

Bearish Scenario

• Expectation: Utilization of bearish patterns to maintain market control.
• Objective: Drive prices below the DEMA 50 towards the lower support line.
• Risk: A strong break above the 100 EMA could challenge bearish dominance.

Conclusion

The current bearish phase in the BTC/USD market suggests a cautious approach for traders. Potential short opportunities could arise from pullbacks to resistance levels. Investors might prefer to wait for clearer signs of a market reversal. It's crucial to consider broader market contexts, including news, fundamental factors, and other metrics, in any trading decision.

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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