Crypto market analysis of January 23, 2024
Written by Yuya Hasegawa
Bitcoin dipped below the $40k psychological level as the flagship cryptocurrency started off a rocky week. The declines in Monday’s China and Hong Kong stock markets have put pressure on bitcoin, which led investors to give up on bitcoin’s short term recovery. As a result, bitcoin failed to defend $41k during Monday’s Asia session. Moreover, the report that FTX has sold 22 million shares worth approximately $1 billion in Grayscale Bitcoin Trust (GBTC) since its conversion into an ETF has accelerated selling pressure during the U.S. session, and pulled down the price below $40k.
The outflow from GBTC should not matter that much as bitcoin’s inflow into other ETFs have offset the outflow by $1.2 billion so far. It seems that the seemingly large amount of daily outflows from GBTC is affecting the market in a psychological way.
CME’s bitcoin futures has finally closed its price gap that was created on December 4th, but bitcoin’s technical outlook has turned bearish now as the spot bitcoin price closed below the lower bound of “ichimoku cloud” –a key technical support.
The bearish market sentiment and technical outlook could put further pressure on bitcoin in the coming days unless the price quickly recovers and closes above $40k. If that fails, the price could continue to drop, and the next spot will likely be $38k.
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