On January 6, Bitcoin briefly soared to $102,180, driven by an impressive influx of $978.6 million into exchange-traded funds (ETFs). This rally, however, followed by a swift downturn on January 7, saw many investors predicting a drop back to the $100,000 mark, leading to a notable sell-off in the crypto market.
Market Sentiment and Activity
Even amidst these ups and downs, trading activity on major exchanges remained strong, highlighting a persistent bullish sentiment among investors. Burak Kesmeci, a CryptoQuant analyst, noted that the 14-day simple moving average of net flows on Binance turned negative. Historically, such metrics often hint at potential price increases for Bitcoin.
In a striking development, Bitcoin outflows from Binance surged to 5,407 BTC—this represents the most substantial monthly outflow ever recorded. Kesmeci pointed out that this trend reflects a shift towards accumulation among investors on the platform, further indicating that BTC’s price might be poised to rise soon. In addition, retail investors in the U.S. displayed renewed enthusiasm, as seen in the positive shift of the Coinbase premium index, which illustrates a resurgence in market activity.
Price Movements and Technical Indicators
The Bitcoin community’s triumph for reaching the $100,000 milestone was short-lived as the price corrected from its gains. However, technical indicators suggest that this pullback does not undermine the overall bullish market trend. The recent fluctuation from just above $102,000 down to below $98,000 has coincided with significant liquidity zones where traders typically place their buy and sell orders.
When Bitcoin climbed past $99,000 on January 6, it effectively swept away earlier equal highs from late December. This action prompted sellers to liquidate their positions within the supply zone, resulting in the ensuing price correction. Observing a pattern familiar to seasoned traders, Bitcoin might revisit equal lows around $97,377 and $96,700 before bouncing back from a critical order block positioned at $96,700.
Outlook for Bitcoin
In summary, it is vital for Bitcoin to maintain daily closing prices above the $97,000 to $98,000 range to uphold its bullish trajectory. Michael van de Poppe, founder of MNCapital, suggested that if Bitcoin can stay above $98,000, it could set the stage for a new all-time high.
Source: Cointelegraph
