These days, the price of Bitcoin (BTC) is floating in a kind of limbo where it is difficult to understand which direction it wants to take.
In some ways, he does seem to be able to awaken, but in others, he seems to be severely hampered by external factors.
The result is that it is not clear where you want to go, even though the short-term sentiment seems quite negative.
Bitcoin (BTC) price.
Limbo, made famous by Dante Alighieri in the famous Divine Comedy, is a temporary state of extreme uncertainty.
Its advantage is that it is indeed temporary, but without a specific timing that can indicate when it can be exited.
Well, the current situation of the Bitcoin price is precisely a temporary state of uncertainty, but it is not known when it might end.
In fact, there is at least a downward trend hypothesis, but this hypothesis has been circulating for a few weeks without being clearly materialized yet.
Bitcoin (BTC) price drop
After reaching an all-time high on December 17 above $108,000, the price of Bitcoin fell on December 20 to below $93,000. Since then, he has done nothing but move more or less sideways over that threshold.
So far, it had gone twenty days without being able to move away from $92,000, so much so that on January 6th it tried to climb back above $100,000, but only for one day, because by January 7th it was… has already retreated. less.
At this moment, the main threshold appears to be precisely $92,000.
If this type of support does not hold, many expect some kind of collapse, perhaps around $85,000 or perhaps even less than $80,000.
Accumulation period?
However, there is also a second hypothesis in circulation.
In fact, by analyzing the trend of the total number of bitcoins on cryptocurrency exchanges, it was observed that there has been no reversal of this trend yet.
Starting from the second half of February 2024, a long phase of reducing the number of Bitcoins on exchanges began, which is most likely a sign of a long and sustained decline in selling pressure as well. This reduction could have been the basis for excellent price performance in 2024.
Although this long decline appears to have stopped this week, there is still no sign of a trend reversal from this point of view.
In other words, not only is the selling pressure still very low, but there are also no signs that it could rise in the short term.
In fact, this dynamic suggests that there may be an accumulation phase underway, which, however, does not rule out the possibility of a further price decline.
Possible recovery in Bitcoin (BTC) price?
All this may point to a subsequent recovery, once this difficult phase is over.
Moreover, there is also other evidence pushing in this direction.
In fact, while short-term sentiment appears clearly negative on the one hand, medium-term sentiment does not appear to be negative.
In particular, such strength of the US dollar, at a time when it should have theoretically weakened, indicates that many large investors and speculators have temporarily exited risk assets in order to accumulate dollars and spend them as soon as possible to buy them back.
If this were the case, the accumulation phase hypothesis would be strengthened, given that periods of accumulation work in precisely this way.
Thus, if the dollar finally starts to weaken sooner or later, the result could be a rebound in the price of Bitcoin as well.
Buying pressure
Right now, the buying pressure is very low, and this is preventing the price from rising.
But deeper analysis reveals that at low prices the buying pressure can increase dramatically.
It must be remembered that even selling pressure is at very low levels, therefore if it does not rise significantly, in case of increased buying pressure, the price should react with a bounce.
The most interesting thing is that it only takes a 5% decline to start seeing this phenomenon, which is a significant increase in (theoretical) buying pressure.
This dynamic seems to confirm the hypothesis of a possible rebound, although it must be said that these parameters can change their values very quickly.
The role of the United States of America
In all of this, the United States plays an increasingly important role.
In fact, the percentage of Bitcoin owned by US entities has reached an all-time high.
These percentages were not reached even in 2016.
The fact is that with the launch of spot BTC ETFs on US exchanges last year, Americans’ ease of access to the Bitcoin market increased significantly, and given that US financial markets are the world’s major markets, the inevitable result was a strong shift in the center of gravity towards America.
In light of this, the importance of the inverse correlation of the Bitcoin price with the dollar index has become increasingly important.