- Selling pressure on Bitcoin was high as its price dropped by over 2%.
- Market indicators remained mostly bearish on the coin.
The ETF approval turned out to be a bearish episode for Bitcoin [BTC], as it witnessed a price correction within days. However, there was good news for investors, as the latest data suggested that the ongoing trend might change soon.
So, AMBCrypto delved deeper into BTC’s state to see whether this was the right buying opportunity for investors.
How Bitcoin plummeted under $43,000
AMBCrypto had earlier reported how the price of the king coin had plummeted a few days after the ETF approval. To be precise, BTC went down by over 7% within a 24-hour timeframe.
However, the coin had somewhat recovered as of press time; its value was 2.4% less than what it was a week ago.
At the time of writing, BTC was trading at $42,989.21 with a market capitalization of over $842 billion. Apart from the ETF havoc, another possible reason behind the downtrend could be BTC’s price moving in a parallel channel.
Ali, a popular crypto analyst, recently posted a tweet highlighting that development.
It appears this parallel channel is holding true! This suggests that #Bitcoin faced rejection from the channel’s upper boundary at $48,000, and now $BTC will retrace to the lower boundary at $34,000, and then rebound back to the upper boundary at $57,000. https://t.co/2vDqYpwmpi pic.twitter.com/fBiNsmJ10C
— Ali (@ali_charts) January 13, 2024
As per the analysis, BTC’s price might soon plummet to $34,000 before it gains upward momentum as it reaches $57,000. Hence, should investors wait for BTC’s price to sink further, or is this the best buying opportunity?
Are investors buying BTC?
To check the larger market trend, AMBCrypto took a look at Bitcoin’s metrics. Our analysis of CryptoQuant’s data revealed that BTC’s exchange reserve was increasing, meaning the selling pressure was high at press time.
Bitcoin’s aSORP was in the red as well. This meant that more investors were selling at a profit. But in the middle of a bull market, it can indicate a market top.
Source: CryptoQuant
Additionally, BTC’s Network Value to Transactions (NVT) ratio registered a sharp uptick after a drop. A rise in the metric is generally perceived to be a bearish indicator, as it has historically coincided with market tops and periods of overvaluation.
Read Bitcoin’s [BTC] Price Prediction 2023-24
It is therefore a wiser option for investors to wait some more to accumulate more BTC, as the aforementioned metrics suggested a further price drop.
Source: Glassnode
A similar picture was also revealed when we checked BTC’s daily chart. Its MACD displayed a bearish crossover. Its Relative Strength Index (RSI) was resting under the neutral mark as well, increasing the chances of a continued downtrend.
Source: TradingView
Source: https://ambcrypto.com/will-bitcoin-crash-to-34k-heres-what-the-data-suggests/