- January 25, 2024
- Posted by: [email protected]
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In the midst of evolving dynamics in the cryptocurrency landscape, the current Bitcoin price prediction has become intricate, with BTC experiencing a downturn to $39,650. This descent can be attributed to a confluence of regulatory developments and shifts in investment product dynamics, setting the stage for a complex market scenario.
On a recent Wednesday, Bitcoin witnessed a noteworthy drop, reaching $39,653 and marking a 1% decline. The catalysts behind this downturn include a legal development unfolding in Canada and a surge in withdrawals from the Grayscale Bitcoin Trust (GBTC), underscoring Bitcoin’s susceptibility to both regulatory and market influences.
A critical legal development in Canada played a pivotal role in this price dip. The Federal Court of Canada declared unconstitutional a law that prohibited cryptocurrency donations to protestors. In response to the “Freedom Convoy” demonstrations against COVID-19 restrictions in February 2022, the Canadian government, under Prime Minister Justin Trudeau, utilized emergency powers to freeze financial assets, including cryptocurrencies. However, the court deemed this measure illegal, emphasizing that it did not meet the criteria for a national emergency. This landmark decision is celebrated by the Canadian Civil Liberties Association, emphasizing the importance of judicial oversight in government actions involving cryptocurrencies.
Simultaneously, the escalating withdrawals from the GBTC contribute to the downward pressure on Bitcoin’s price. Since transitioning to a spot Bitcoin exchange-traded fund (ETF) on January 11, GBTC has witnessed a substantial outflow of funds, surpassing $3.4 billion. This persistent withdrawal trend, exemplified by a staggering $515 million withdrawal on January 23, raises concerns in the market, leading to a 13% reduction in GBTC shares in circulation.
While Bitcoin experienced a modest 0.33% rebound on January 24, trading at $39,720, the overall market sentiment remains uncertain. The digital currency is approaching a pivotal point at $39,947, as indicated by the green line on the 4-hour chart. Immediate resistance levels are identified at $40,884, with subsequent barriers at $41,791 and a more formidable one at $43,394. On the downside, support levels are found at $38,618, with potential further supports at $37,638 and $36,745 in cases of intensified bearish momentum.
The Relative Strength Index (RSI) now rests at 44, suggesting a neutral market with the potential for movement in either direction. The 50-Day Exponential Moving Average (EMA) at $40,494 hints at a tug-of-war between bullish and bearish sentiments. Chart analysis reveals a double top pattern around $39,950, and a failure to breach this level could trigger a selling trend, keeping the overall trend bearish as long as Bitcoin remains below the $40,000 threshold.
