Bitcoin‘s price has fallen below $41,000, with declining volumes and increased selling by whales who have liquidated billions in BTC following ETF approvals. This shift from short-term to long-term investor selling is seen as a bullish signal.
Altcoins started to decline early, with investors expecting a return to altcoins after initial January sales shifted to Bitcoin post-ETF approval. However, the $49,000 level was seen as a profit-taking zone, preventing the anticipated switch back to altcoins and suggesting a deeper correction might be on the horizon.
The cumulative value of cryptocurrencies has been falling since early January, from a peak of $1.8 trillion to a struggle to maintain the $1.61 trillion resistance level, indicated by two long upper wicks signaling selling pressure.
If the selling wave in cryptocurrencies continues, the total market value could drop by 12% to $1.4 trillion, leading to even larger losses for altcoins. Conversely, reclaiming the $1.61 trillion level could lead to a 35% increase towards the next resistance at $2.1 trillion.
Bitcoin’s price broke below a rising parallel channel on January 12, signaling a continuation of the downtrend. If the decline persists, Bitcoin could fall another 9% to the $37,600 support level. Despite the bearish outlook, reclaiming the channel’s support trend line could initiate a move towards $48,500. With the first uninterrupted trading week for spot Bitcoin ETFs, upcoming PCE data, and a halving event approaching, the medium to long-term outlook remains positive, but investor caution is currently justified.