After a drop to $38,555, Bitcoin has climbed back above the $40,000 mark, while altcoins have shown movement with some achieving double-digit gains. However, these coins are still far from their peaks during the days of ETF pricing. The current outlook for the cryptocurrency market points to a cautious optimism, with a busy agenda ahead and weakening hopes for interest rate cuts due to a rise in the DXY index.
The cumulative value of cryptocurrencies reached a peak of $1.81 trillion on January 11 within a rising parallel channel that started on December 9. The market then lost its support area of $1.61 trillion and exited the channel.
Despite a recent bounce, the cumulative market cap (TOTALCAP) fell below the $1.52 trillion support area. Without reclaiming the horizontal support, a further decline to the $1.39-1.4 trillion support zone could be expected.
Bitcoin’s price broke below a rising parallel channel that had been in place since December, signaling an end to the upward movement and setting the stage for the recent low. If Bitcoin sellers remain strong, the next support level to watch is $36,950. Conversely, to entertain a bullish scenario, the $41,000 horizontal support must be reclaimed.
Currently, Bitcoin’s price is in limbo, with the $41,000 region becoming crucial in the coming hours. The advantage lies in the expectation that GBTC sales, which were initially high, would stabilize. If selling pressure continues to weaken, the negative sentiment could reverse, especially with the potential for short-term oversold conditions to bounce back, growth in spot BTC ETF issuers’ reserves, and weakening GBTC sales. Still, predicting a clear direction is challenging.