Bitcoin, the largest cryptocurrency, finds itself at a critical juncture with its market trajectory. The delay in the U.S. Securities and Exchange Commission’s (SEC) decision on a Bitcoin Exchange-Traded Fund (ETF) has introduced uncertainty, keeping the cryptocurrency’s price below $38,000. The SEC’s decision, now expected by January 10th, is pivotal for investor sentiment, and Bitcoin’s reaction to key levels, such as moving beyond $41,000 or dipping below $35,000, will be closely monitored.
Despite Bitcoin’s historical strong performance in November, with an average return of nearly 38%, current weekly charts suggest potential downturns. Sell signals from the Market Reversal Indicator (MRI) and indications of Swing Failure Patterns (SFP) hint at possible reversals from recent highs.
On-chain metrics since October 25th reveal weaknesses, with a decline in daily active addresses and Social Dominance, contrasting with Bitcoin’s recent price surge. The increasing price alongside declining Market Value to Realized Value (MVRV) ratios underscores vulnerabilities in Bitcoin valuations.
Technical analysis adds to the caution, with a weekly bearish breaker ranging from $28,000 to over $41,000. This aligns with predictions of a bearish trend, especially as Bitcoin balances near a weekly Fair Value Gap (FVG) around $37,000. The potential formation of a lower low below $24,000 poses a threat to the optimistic narrative for Bitcoin in 2023. However, there’s a hopeful scenario for bulls if support holds at $30,000, potentially triggering another bullish run toward resistance near $46,000.
Investors are advised to closely monitor these developments, as they could significantly impact Bitcoin’s price and the broader cryptocurrency market in the coming weeks and months.