Key Points
- Bitcoin’s price has seen a decrease of more than 6% in the third week of January 2024, nearing a critical support level of $92.2K.
- The cryptocurrency market is experiencing a trading paralysis, with a significant decrease in whale activity and increased fear due to the upcoming inauguration of President-elect Donald Trump.
The price of Bitcoin has been experiencing reduced bullish momentum as we enter the third week of January 2024.
This comes ahead of the second inauguration of US President-elect Donald Trump, with the flagship cryptocurrency dropping over 6% in the past week and currently hovering just below $93K.
Market Dynamics
Despite the increase in bearish volatility, only $313 million has been liquidated from the crypto-leveraged market, with most of this involving long traders.
This has led market intelligence platform Santiment to conclude that the cryptocurrency industry is currently experiencing a state of trading paralysis, likely due to the anticipation of a potential rebound.
The price of Bitcoin has been affected by a decrease in demand from whale investors and a retreat of retail traders from the volatile crypto market.
On-chain data analysis reveals that Bitcoin’s network activity has dropped to its lowest level since November 2024, with approximately 667,100 active addresses.
Whale Activity and Market Speculation
Over the past month, the number of large transactions on the Bitcoin network has decreased by around 51%, from 33,450 to 16,180.
This notable reduction in whale activity was highlighted when US spot BTC ETFs recorded a net cash outflow of $149 million last Friday, primarily led by BlackRock’s IBIT, a significant purchaser of Bitcoins.
The upcoming inauguration of President-elect Donald Trump has sparked fear of a sell-the-news event, leading to bearish sentiments within the crypto market.
Additionally, crypto investors have spent the past year speculating on Trump’s re-election, which was confirmed in the 2024 elections.
It’s worth noting that the overall supply of Bitcoin on centralized exchanges has increased by around 2,729 in the past 24 hours, hovering around 2.19 million at the time of writing.
The overall BTC futures open interest (OI) has decreased by $6 billion in recent days, standing at around $60 billion, indicating a potential correction on the horizon.
Predictions and Analysis
Veteran trader Peter Brandt has noted that the price of Bitcoin has been forming a head and shoulders (H&S) pattern after encountering a significant resistance level around $100K.
Moreover, the daily Relative Strength Index (RSI) has been showing a falling divergence over the past few weeks.
However, Brandt argued that the BTC price must consistently fall below the neckline of the H&S pattern, around $92K, to confirm this reversal pattern.
If the H&S pattern is confirmed, Brandt expects the Bitcoin price to potentially drop to a range between $75K and $77.5K.
On the other hand, he also noted that the BTC price might be forming a bear trap, with a likely rebound to happen around $92K.
In such a case, Brandt believes that the Bitcoin price would be well-positioned to rally towards a peak of between $125k and $150k in the second half of 2025.
