The crypto market is in a strange state of confusion as a result of the BTCs trajectory during the last few months. After reaching an all-time high of $69,000 in early November, Bitcoin has generally been in a decline, with lower highs and lower lows.
Bitcoin fell to $42K after a flash drop on December 4th. When the same price level was tested again on January 7, the market’s mood changed dramatically.
BTC plunged almost 30% from its all-time high of $69,000 in December, while CME BTC Futures volumes fell by 77.4% to $11 billion, the largest monthly drop ever.
According to the Bitcoin Fear and Greed Index, the market sentiment when BTC approached $40K was one of ‘extreme fear.’ In fact, it hit a new low for the first time since July of last year.
In addition, over the last week, more Bitcoin has entered exchanges, indicating a modestly pessimistic shift in investor mood.
$30K or $50K?
BTC’s price movement presently resembles that of February-May, when the price achieved four tops while the Relative Strength Index reached lower highs. BTC’s drop to $30K in May was caused by four price tops establishing lower highs, as well as the RSI mimicking a similar downturn.
BTC bulls’ last hope for a substantial reversal appeared to be the $40K support at the time of writing, provided the same holds and BTC can reproduce gains. There is, however, a larger negative trend line to overcome.
For the time being, a reversal in MVRV 365 days is a good reversal opportunity. However, if the price does not hold, bullish expectations will be disproved.
If Bitcoin concludes the week below $40K, there’s a good chance it’ll test the $30K support in the near future. A pivotal reversal of the $40K mark could determine BTC’s path forward.