Bitcoin is losing momentum as to why $ 40,000 is the key to future profits

Written by Adam Rio

Bitcoin has been abandoned at a price close to $ 44,000 and has moved sideways this week. A benchmark-based crypt could try to break this resistance level once again, but is likely to stay within the range until $ 50,000 and $ 53,000 are recovered.

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At the time of the press, Bitcoin is trading at $ 42,341 with a 3.5 percent loss in the last day.

The BTC moves sideways on a 4 hour chart. Source: BTCUSD Tradingview

The price of the BTC has developed positively since the printing of the US Consumer Price Index (CPI), which is a measure of inflation. Prior to the report’s release, Bitcoin’s order backlog was clear and has been reorganized during the week, creating new support levels close to $ 38,000 and $ 40,000.

Data from Material Indicators show an important cluster of bidding below BTC’s current price level, suggesting, at least in the short term, that bulls will continue to defend the $ 40,000 price cap. As shown below, there are more than $ 20 million in offer orders at these levels.

The price of BTC (blue line) with important support (quotation orders below the price) in the short term. Source: Material Indicators

In that sense, analyst firm Jarvis Labs believes Bitcoin can see a few weeks of relief and less sales pressure. This is supported by the rising difference in Bitcoin’s 30-day returns, as shown below whenever this meter returns to 0% at that threshold. BTC trends are rising.

Source: Jarvis Labs via Twitter

According to the company, the rise has been driven mainly by retail investors as measured by Bitcoin’s accumulation trends for the past month. Jarvis Labs added the following:

Accumulation trend scores on a 30D basis indicate that retailers have the confidence to accumulate on the bottom, while whales are more reluctant to do so. The 7D scores show the same behavior, unlike what we observed in December.

Bears cannot shake long-time owners of Bitcoin

Two of Jarvis Labs’s gauges are still in the red, especially those related to the number of Bitcoin coins in circulation and the number of BTC coins compared to the number of stable coins in the market. This suggests that some investors are selling at a loss and others are taking a profit when the price reached $ 44,000.

In addition, Jarvis Labs was able to conclude that the declining price has not upset long-term owners. Short-term holders have dropped their average or realized price from $ 53,000 to $ 50,900, which does not pose an immediate threat to the relief bounce, but as the company said, it will affect future repairs.

As NewsBTC reports, Jarvis Labs has been expecting some impact on the derivatives sector for BTC to rise. That time seems to be here with negative funding for futures contracts on Binance, FTX and most cryptographic platforms.

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If this metric continues to move into negative territory as prices rise, it may indicate a more sustainable rally. To this end, Jarvis Labs added the following information on the open interest rate (OI), the total number of contracts traded on stock exchanges and their impact on BTC’s price:

The change in open interest rates / market disruptions has risen to the peak of the summer of 2021. As the price starts to rise now, this meter will start to fall, suggesting that more short compression is possible.

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Adam Rio

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