Bitcoin might currently be trading below a $43,500 resistance level, but analysts see this downside action slowing down and a bullish performance is set to happen anytime soon. In a recently released weekly report by crypto exchange Coinbase, many technical factors currently slowing down the price of many cryptocurrencies industry (most especially Bitcoin) are starting to become exhausted, which could lead to a more supportive trading environment.
Intensifying Positive Macro Backdrop
Price action shows Bitcoin has majorly traded below $43,700 since the middle of January, as the launch of spot ETFs ushered in mixed reactions from the market. Despite averaging billions in weekly flows, the ETFs also exerted downward pressure on the price of Bitcoin, particularly with a sizable sell-off of shares in the Grayscale BTC Trust exchange-traded fund (ETF) led by defunct crypto exchange FTX.
Coinbase analysts, on the other hand, have observed that the dynamics are beginning to shift toward a more favorable trading environment, as the rate of selloffs has now slowed down. To back up this claim, the report noted the emergence of crypto lending company Celsius Network from bankruptcy and the recent inflows into spot Bitcoin ETFs. Notably, these ETFs averaged more than $200 million daily inflows last week, with an average daily volume of $1.35 billion.
BTCUSD slightly below the $43K level today. Chart: TradingView.com
The report also highlighted the factors in the current US economy that may contribute to a positive crypto market trend. The market factors include the US budget deficit widening and a savings winddown by American households points to activity and inflation, increasing the possibility of a better crypto market than it was months ago.
Also, analysts anticipate a slowdown in the economy during the first half of the year. As a result, the Federal Reserve’s easing tactics could include cutting interest rates by 100 basis points this year. Ultimately, this would coincide with the much anticipated Bitcoin halving, leading to a spike in the prices of Bitcoin and other cryptocurrencies.
Coinbase’s report also touched on Solana’s renewed ecosystem being propped up by token launches like the recent airdrop for Jupiter, Solana’s leading decentralized exchange aggregator.
Current State Of Bitcoin
Bitcoin saw its undergoing little spikes multiple times last week, with one instance leading to a 4.57% increase on January 30th. However, the crypto majorly bounced between $41,800 and $43,700 during the week with the most perambulation around $42,500 to $42,900. According to a social media post by crypto analyst Ali Martinez, 912,626 BTC has now been transacted within the $42,560 price range, making it the most significant interest zone to date.
An impressive total of 912,626 #BTC has been transacted within the $42,560 price range, marking it as the most significant interest zone for #Bitcoin to date! pic.twitter.com/jdR0vtxWVE
— Ali (@ali_charts) February 2, 2024
At the time of writing, Bitcoin is trading at $42,800, down by 0.64% in the past 24 hours.
Featured image from Adobe Stock, chart from TradingView
