Bitcoin price’s upward momentum has stalled after a steady rise in recent months. In particular, as key resistance levels near $45,000 are approached, there is a noticeable decline in buyer confidence, challenging BTC’s ability to break through these levels. This has led sellers to take advantage of short selling opportunities. Amid this, uncertainty remains as investors and traders alike debate whether this signals a potential recession or simply a temporary consolidation.
BTC declines following Grayscale chaos
Today, the Bitcoin price experienced a decline as market sentiment shifted from positive to negative as traders liquidated long positions in response to rising funding rates. According to data from Coinglass, Bitcoin recorded a total of $29.6 million in liquidations, $24 million of which came from long-term liquidations.
The downward trend in Bitcoin’s value was further exacerbated following the announcement that Barry Silbert, founder and CEO of Digital Currency Group, and Mark Murphy, President of DCG, had resigned from the board of Grayscale Investments. It has become clear.
Their resignation will be effective January 1, 2024, according to Grayscale Bitcoin Trust’s latest filing with the Securities and Exchange Commission. This development follows the SEC’s ongoing review of GBTC’s application to convert into a spot Bitcoin exchange-traded fund.
The news sparked a wave of long-term liquidations. However, BTC price is now finding a stable area where it can maintain its momentum. There is a fierce battle between bulls and bears near $42,000 with the long/short ratio currently trading at 1.
But while traders are anticipating a Santa Claus rally next week, they are also keeping a cautious eye on an important annual event: options expiration. Adding to these mixed sentiments is the possibility that the SEC may approve a spot Bitcoin ETF by January 10th.
What’s next for BTC price?
Bitcoin reached significant resistance near $44,500 and faced strong opposition from bearish traders. BTC price is currently in a downward trend and recently touched the EMA100 trendline on the 4-hour chart. At the time of writing, BTC price is trading at $42,304, down more than 2.8% from yesterday’s price.
Falling moving averages suggest a seller advantage, with the Relative Strength Index (RSI) showing negative divergence when trading at the 32 level. A sure sign of a bearish turn is for Bitcoin to close below the rising support line, currently at $41,500. If this happens, the BTC price could fall to $40,000.
Conversely, if Bitcoin rebounds from its current position or support and breaks the EMA20 and $44,700 levels, it could signal the start of a new uptrend. In this scenario, the price could surge to $48,200, with a further rise to $50,000 possible.