Bitcoin bulls maintain their push towards $28,000, while calls for a BTC price drop intensify.

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22 Jan 2024

Introduction:

Bitcoin’s price remains under scrutiny as it attempts to breach the $28,000 resistance level while some market participants express concerns about potential downward movements. In this article, we’ll delve into the recent developments in the Bitcoin market, including insights from key traders and whale behavior.

Bitcoin’s Volatility Eases:

Bitcoin experienced a period of reduced volatility as it failed to break above the $28,000 mark. The cryptocurrency’s price fluctuated within a narrow range, hovering approximately 1.5% lower. This stability raised fresh concerns among traders about potential losses in the near future.
BTC/USD 1-hour chart. Source: TradingView

Key Moving Averages in Focus:

Prominent trader Daan Crypto Trades highlighted an ongoing battle between two crucial moving averages (MAs) on one-day timeframes. The Daily 200MA (Purple) and the Daily 200EMA (Blue) are currently pivotal levels, and which one gives in first may determine Bitcoin’s trend for the rest of October. The struggle between $27,000 and $28,000 continues to capture traders’ attention.
BTC/USD annotated chart. Source: Daan Crypto Trades/X

Increased Open Interest:

Daan Crypto Trades also pointed out the rising open interest (OI) across cryptocurrency exchanges, which could trigger a short squeeze followed by a long squeeze. This pattern has historically led to upward price movements followed by corrections. Monitoring this region closely is advisable.
BTC liquidations chart (screenshot). Source: CoinGlass

Whale Trading Behavior:

Material Indicators examined whale trading behavior over the past week and observed contradictory moves among different categories of whales. While whales with orders ranging from $100,000 to $1 million increased their exposure, it did not spark a broader uptrend. Additionally, other whales were net sellers, with nearly $60 million in assets sold over the same period. The reasons behind these actions, including the potential liquidation of assets from the defunct exchange FTX, were discussed.
BTC/USD order book data for Binance with whale activity. Source: Material Indicators/X

Potential Liquidity Grab:

Exitpump, a popular trading account, identified a potential liquidity grab being prepared below the $27,400 support level. The analysis suggests that Bitcoin’s price might make multiple attempts to break through resistance, forming a top.

Conclusion:

The Bitcoin market is currently characterized by increased scrutiny, with traders closely monitoring key support and resistance levels, moving averages, and whale behavior. While some anticipate a dip in the price, others are prepared for potential upside moves. As always, it’s essential for investors and traders to conduct their research and exercise caution when making decisions in the volatile cryptocurrency market. This article does not provide investment advice or recommendations.
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Written by Shantanu Gupta

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