What’s Next for BTC Price Predictions as Bitcoin Drops to $41,000
Journalist
- Bitcoin is expected to bounce off the $41,000 resistance zone.
- The MVRV ratio continues to decline and market sentiment is in favor of buyers.
Santiment, a data provider, noted in a post on X that there was a shift to the negative around the time the Bitcoin news broke. [BTC] The approval of spot ETFs helped mark the local peak. Market sentiment changed as the price fell 16.9% from last week’s high to $40.6K.
AskFX analyzed some Bitcoin metrics, including its liquidation levels, to determine whether an upward reversal or a continuation of the downward trend is more likely.
MVRV ratio falls below late October lows.
Santiment’s 180-day MVRV rate skyrocketed during the October 2023 rally. The ratio peaked at 37.88% on December 6th, indicating a potentially overvalued asset. Since then, the metric has fallen.
On January 13, a few days after the spot ETF was approved, the price fell below 17.66%. BTC’s MVRV was already at this level on October 28th.
At the time of publication it was at 10.88%, which is still a positive number but suggests that holders are increasingly selling some of their BTC.
Weighted sentiment reached a six-month peak between January 9 and 11, but has fallen dramatically since then. Social volume for Bitcoin followed a similar pattern. This suggested that the short-term hype had died down.
The ETF approvals triggered a selling event from which the market is still recovering. Since December 5th, open interest has fallen. These spikes were accompanied by short-term price breakouts that were quickly corrected.
The accumulation of whales shows that long-term investors still have hope
The distribution of BTC showed that addresses with 10,000 to 1 million BTC have continued to increase their BTC holdings over the past two months. Meanwhile, sales of addresses with 0-100 BTC began in the first weeks of January.
This activity again shows that some BTC holders want to profit as BTC approaches the 50,000 mark.
The $41,000 level could be a rebound for traders.
BTC has tested the range lows at $40.6K six times since December 11th. Each of them experienced different levels of recovery. Although BTC’s structure is bearish and the downward momentum is strong, there is still a possibility of a recovery.
The spread was still significant despite two outbreaks in recent weeks. The breakouts quickly reversed and levels in this range continued to remain significant.
TradingView: BTC/USDT
A fall below $40.2K invalidates the idea of a bounce. This idea can be refuted by the OBV. At the time of publication, it was still trading at lower support levels since late October. If it falls below this value, the sellers are still dominant.
BTC is likely to fall to the next support level at $37.5K.
AskFX also examined data on Hyblock’s liquidation levels. We conclude that the market has too much weight in favor of the bears for the decline to continue.
The liquidation level at $42.4K is $181 million and the liquidation level at $44K is $143 million.
The delta of cumulative liquidity levels was also hugely positive, showing that short liquidation levels outweighed long liquidation levels.
Bitcoins: Read Bitcoin Price Prediction [BTC] for 2024-25.
A recovery towards these two levels is expected.
Look for levels like $42.4000 and $44.3000. These are resistances in the medium or high range.
