Since U.S. exchange-traded funds for the largest digital asset started trading on January 11, the slide of Bitcoin, the largest cryptocurrency by market capitalization, has paused. If a bottoming signal on its charts is verified, Bitcoin now faces a crucial test.
On Wednesday, the price of bitcoin increased by more than 4%, peaking at $40,527 before retreating to trade at $40,091 at the time of writing.
In light of the fact that Bitcoin has recovered from its January 23 low of $38,501, Glassnode cofounder “Negentropic” on X speculates that the price may have just bottomed in a “descending wedge with a classical throw-over.”
https://x.com/Negentropic_/status/1750140909935579429?s=20
Furthermore, if this is the true, Bitcoin may go to $42,000 before retesting at $40,500, at which point it would likely soar. Reassuringly, the cofounder of Glassnode continued, saying that the “bigger picture still remains very bullish” for the price of Bitcoin.
Prior to the approval of the Bitcoin ETF, there was a surge in speculation in the digital asset markets, and within the next few days, there was a widespread sell-the-news event.
Since the ETFs went live, Bitcoin has dropped more than 20% from its intraday high of $49,021 as anticipation for the products gave way to concerns about the kind of demand they would ultimately get.
Bitcoin demonstrates resilience
According to Glassnode, if the degree of Bitcoin bull market corrections by cycles is evaluated, then a higher degree of resilience may be observed across several cycles. As of right now, the biggest drop is only -20.1%, which is negligible when compared to historical precedent.
With this most recent sell-off, Bitcoin has now lost around 20% four times in the previous year or so.
According to Elliott’s wave theory, market trends tend to repeat themselves. If the method is applied to Bitcoin, it suggests that the biggest cryptocurrency will find a bottom between $36,000 and $38,000 before a fifth wave accelerates the rise from the previous year.
Cryptocurrency analyst Ali claims that past trends show that BTC price drops in bull markets are inevitably followed by more price gains. This suggests that those looking to profit from Bitcoin’s possible ascent may find that drops provide wise purchasing opportunities.
