The Bitcoin (BTC) price is showing general weakness as it struggles to establish $ 34,000 as a support level. Overall, BTC appears to be stagnant with no signs of recovery from short-term relief, prompting traders to be cautious.
A worrying trend is that Bitcoin volume has stagnated along with its price, with the exception of the “Elon bomb” on January 29. This trend indicates that there is an overall drop in buyer demand from the top of $ 42,000, despite the BTC hovering in the low $ 30,000 region.
Bitcoin becomes unstable after revisiting $ 38,000
On January 29, Bitcoin’s price rose to $ 38,461 at Binance after Tesla’s CEO and the world’s richest man, Elon Musk, ostensibly showed support for Bitcoin.
However, before that hike, network analysts were already warning that Bitcoin’s momentum was waning.
Ki Young Ju, the CEO of CryptoQuant, for example, pointed to the high selling pressure of Bitcoin miners as a sign of a short-term bearish scenario.
Although the price of Bitcoin rose briefly by 14%, it dropped back to less than $ 34,000 in 24 hours. Consequently, the weakening of the on-chain indicators was likely a warning that the BTC would redo most of its “Elon bomb” gains.
Ki I wrote before the rally:
“The Exchange Whale Ratio hit its eight-month high, meaning that $ BTC could have a big red candle if the price drops. It is supposed to be below 85% if this bull run is legitimate. Otherwise, it is likely to be a bull trap. “
Whales were probably sold when Bitcoin’s price rose sharply to the $ 38,000 resistance level, causing a sharp correction.
With unstable indicators in the chain and some selling pressure from mining companies, traders are also showing caution about BTC / USD expectations in the short term.
A trader pseudonym known as “Salsa Tekila” said he is not using leverage until Bitcoin has burst or dropped to $ 30,000. It said:
“We are at that point where $ BTC is far enough from 30,000 that I am not comfortable wanting any form of leverage, but at the same time I would not sell. So staying in the place for a long time until a big down / open legacy / probably Monday morning is the best. WITHOUT LEVERAGE ”
Meanwhile, another popular pseudonym trader known as “General Byzantine” argues that the recovery is broken. Therefore, even if Bitcoin is optimistic in the macro scenario, more downside is possible until it sees a convincing breakthrough in lower timeframes. It noticed:
“The bull race is still at IMO, but the bull is broken. If we claim the annual TWAP again, we can continue with the bomb, but until then it seems kind of me. “
What to worry about
Traders and technical analysts are closely watching Bitcoin’s reaction to the $ 34,500 to $ 35,000 range.
If Bitcoin comes out of it with strength, momentum and high volume, the likelihood of a reversal of the short-term trend increases.
However, if Bitcoin strives to re-test the $ 34,500 resistance level and continues to stagnate in the $ 33,000 region, the risk of an additional break for the $ 33,000 support remains.
Additional signs that the BTC price may suffer another downturn include the Crypto Fear and Greed index remaining at levels of “extreme greed” and Google’s searches for “Bitcoin” falling 50% since the multi-year highs observed earlier this month .