Bitcoin price falls below $28.5K as trader claims Bitcoin ‘reeks of unbelief’

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22 Jan 2024

Introduction:

Bitcoin’s price continues its October rally, aiming to reach $28,500 as the month begins. However, market analysts urge caution due to recent fluctuations and a sense of disbelief in the crypto space. In this blog post, we’ll explore the recent price action of Bitcoin and the sentiments of prominent traders and analysts.
BTC/USD 1-day chart. Source: TradingView

Bitcoin’s October Surge:

As October kicks off, Bitcoin has maintained its bullish momentum, with the price hovering around the $28,500 mark. This comes after a relatively subdued monthly candle closure in September when BTC/USD finished at $26,970. Despite the recent gains, caution is advised.

Analyst’s Concerns:

Renowned trader and analyst Rekt Capital expressed concerns about Bitcoin’s recent performance. He pointed out that Bitcoin’s September Monthly Candle Closure was below the critical level of $27,100, which has now become a resistance level. While October has seen a breakout, Rekt Capital warns that there is a possibility of a price rejection or an “upside wick,” as Bitcoin has exhibited similar behavior in the past. This means that Bitcoin could surge temporarily before retracing.
BTC/USD annotated chart. Source: Rekt Capital/X

Market Sentiments:

Market observers have noted that despite the price gains, there seems to be a sense of disbelief among traders. Spot bid activity remains strong, while funding rates in derivatives markets are negative. This divergence between the spot and derivatives markets suggests that not everyone is convinced of Bitcoin’s sustained upward trajectory.

Dollar’s Influence:

Interestingly, the U.S. dollar has also shown strength, eager to reach new local highs. The U.S. Dollar Index (DXY) rebounded after Congress avoided a government shutdown, approaching its 2023 highs. Analysts speculate that if the DXY continues to strengthen, it could reach 108, marking an 11-month high. This demonstrates the complexity of the current economic landscape, where both Bitcoin and the U.S. dollar are making significant moves.
DXY 1-day chart. Source: TradingView

Conclusion:

In conclusion, Bitcoin’s price rally in October is a promising sign, but traders and analysts advise caution due to the possibility of a price rejection. The sense of disbelief in the market, coupled with the strengthening U.S. dollar, adds complexity to the current financial landscape. Investors and traders should remain vigilant and closely monitor the market for further developments in the coming weeks.
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Written by Shantanu Gupta

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