On January 3rd, a day marked for celebrating Bitcoin‘s first block production, investors faced an unwelcome surprise as the cryptocurrency experienced a significant price drop. Despite the optimism surrounding spot Bitcoin ETF applications, Bitcoin’s value fell by 5.69% in the last 24 hours, trading at $42,550 at the time of the report.
Bitcoin encountered substantial selling pressure at 3 PM on January 3rd, plunging below the EMA 200 level (red line) on the two-hour chart to a low of $40,850. The cause of the decline remains unclear, but it could be linked to negative developments in ETF applications, particularly rumors suggesting a delay in the application process to a later phase.
The increase in long positions in the futures market also raises the possibility of a liquidation process in the market, which could have contributed to the sell-off. This dynamic suggests a heightened risk environment for Bitcoin investors.
Key support levels to watch on the two-hour Bitcoin chart are $41,501, $40,815, and $40,309. A close below $41,501, in particular, could intensify the selling pressure. Conversely, resistance levels to monitor are $42,957, $43,884, and $44,410.
The market’s response to these technical levels could determine the short-term trajectory of Bitcoin’s price. Investors and traders are closely observing these indicators to make informed decisions in a volatile market scenario.
Overall, the Bitcoin market is currently facing uncertainties that are affecting investor sentiment. The outcome of the ETF applications and market reactions to support and resistance levels will be crucial in shaping Bitcoin’s price movements in the coming days.