Bitcoin prices by the end of January were able to interrupt the negative trend and returned to the range of 41500–44000. The fall in price below the 40000 level led to the closing of short positions, and the bulls rushed to buy the cheaper main cryptocurrency. By the current moment, the upward rebound has slowed down, but technical indicators point to the preservation of growth potential up to the upper boundary of the flat — the level of 44000.
Bloomberg representatives conducted a survey among the leading crypto market makers. Analysts from Auros, Wintermute Trading and GSR Markets expect a gradual improvement in the liquidity situation as the popularity of Bitcoin ETFs grows. Specifically, at the end of January, trading volume in the market reached a 19-month high of $1.4 trillion. However, this is still far behind the volumes of 2021, when the Bitcoin price set an all-time high.
Wintermute Trading analysts forecasted that cryptocurrency market liquidity will return to the record levels of three years ago by the end of 2024. For now, traders and investors are only looking at new instruments. In particular, the aggregate amount of cash invested in recently approved Bitcoin ETFs now stands at about $1.6 billion. Compared to the date of the beginning of trading (January 11), the turnover on them fell almost 4 times.
Chuan Jin Fong of GSR Markets draws attention to the still too high spreads in the cryptocurrency market. A significant number of buy and sell orders are outside the +/- 2% range of the market price, indicating a lack of investor activity. At the same time, there is significant potential for increased market liquidity when Bitcoin ETFs spread to more countries.
On the daily Bitcoin chart, 41500 is becoming an increasingly important support level. If the price reaches it, there are good chances for a rebound and further movement to the level of 44000. The RSI indicator shows that the buyers retain the initiative.
The following trading strategy can be suggested:
Buy BTCUSD if the price falls to the level of 41500. Take profit — 44000. Stop loss — 40000.
Traders can also use a Trailing stop instead of a fixed Stop loss at their discretion.
This content is for informational purposes only and is not intended to be investing advice.
