Key insights:
- Bitcoin price just demonstrated strength on a short-term support level.
- Gold price is overheated, and it has been forming a bearish divergence.
- Bitcoin Whale cohort shows short-term bullish confidence.
Bitcoin price embarked on a sizable pullback in the last 7 days as the market grew more uncertain. At around the same time, the gold price soared to new historic highs as it absorbed liquidity rushing towards safety.
The bears have since retreated, allowing the Bitcoin price to cool off. However, investors are now curious as to how the cryptocurrency will conclude the last week of January. Will it recover or extend its downside with the possibility of closing the month below its opening price?
The gold price may still determine the Bitcoin price outlook for the remainder of January. More specifically, the precious metal was deeply oversold at the time of observation, but it also formed a bearish divergence with its RSI.
Bitcoin Price Finds Support, but Will Demand Pick Up?
Overbought gold prices may need to cool off, and this may drive liquidity flows into Bitcoin. This potential outcome is more likely considering the recent wave of BTC sell pressure.
The Bitcoin price has been gradually carving out a bottom range with a slight ascending gradient since November. The cryptocurrency’s latest bearish push resulted in yet another retest of the same support.
While the BTC price respected the aforementioned support, it has been waiting for liquidity flows to unlock recovery, and gold outflows may be the signal that the market needs for a bullish confirmation.
However, on-chain data revealed that whales were already positioning to take advantage of such a move. According to Coinglass, large order book flows have been leaning in favor of the bulls in the last 2 days.
For context, whales executed over $126 million worth of net spot buys across Binance, OKX, and Coinbase in the last 2 days. They also executed over $3.2 billion worth of net longs on Binance and OKX futures during the same period.
Macro Concerns Cool as Regulation Outside the US Improves
Last week’s crypto market crash occurred in line with elevated macro uncertainty. Bitcoin price also fell from its local high, suggesting a cautious stance of traders.
This was mostly due to the rising political temperatures at the time, mostly instigated by President Trump.
Fast forward to the present, and things have cooled slightly as global governments try to save face at the World Economic Forum in Davos. This retreat from last week’s unfavorable market conditions may create more certainty for investors, potentially allowing liquidity to flow back into the market.
It was now clear how long this temporary cease fire will last. However, some positive Bitcoin news this week may lay the groundwork for more confidence among investors.
For example, recent crypto news revealed that Thailand is opening up to crypto investments, mostly through regulatory changes.
The country’s financial regulator is reportedly laying the groundwork for crypto futures, ETFs and tokenized investments in Thailand.
This highlights the rapidly accelerating pace at which other regions outside the US are embracing Bitcoin and the broader crypto market. Thailand’s decision to go down this road will allow cryptocurrencies to be recognized as legal assets.
This move may also encourage other countries in the Southeast Asia region to embrace the trend.