BTC price analysis sees $38K next if Bitcoin fails to rally bulls

Bitcoin ( BTC ) saw new seven-week lows into the Jan. 22 daily close as traders warned that worse was to come.

Hayes on BTC price downside: "Still more to go"

Data from Cointelegraph markets Pro and TradingView showed a BTC price drop to $39,440 sparking only a modest recovery.

The largest cryptocurrency faced consistent sell-side pressure from sources including the Grayscale Bitcoin Trust (GBTC), the largest Bitcoin institutional investment vehicle, as part of consumer rotation among new spot Bitcoin exchange-traded funds (ETFs).

Now down up to 20% versus January’s highs, BTC/USD gave little inspiration to traders, some of whom predicted new losses as liquidations mounted .

“Still more to go …,” Arthur Hayes, former CEO of crypto exchange BitMEX, summarized on X (formerly Twitter).

Keith Alan, co-founder of trading resource Material Indicators, shared the sentiment.

Uploading a chart of long and short signals from one of the platform’s proprietary trading tools, he warned that bulls needed to “build some momentum” at current prices near $40,000. If not, a return to $38,000 could be next.

Even more importantly than reclaiming $40k, #BTC has managed to reclaim VWAP and climb back into the range. Bulls need to build some momentum or I'm expecting a visit to the $38k range. #NFA pic.twitter.com/IOTZxGyMyp

— Keith Alan (@KAProductions) January 23, 2024

A separate chart showing BTC/USDT bid liquidity for largest global exchange Binance meanwhile highlighted bidder interest immediately below the spot lows — but with sellers absent until $44,000.

Material Indicators additionally noted a class of Bitcoin whale making sustained purchases throughout the past month, these mounting to $800 million.

"Big squeeze" seen following GBTC cooldown

Charting the ongoing state flux among the fledgling spot ETFs, meanwhile, Bloomberg Intelligence analyst James Seyffart likewise suggested that GBTC was not yet out of the woods when it came to BTC sales.

GBTC sold a total of $640 million in Bitcoin on Jan. 22, canceling out previous signals that sales were slowing.

Seyffart nonetheless noted increasing inflows to other ETFs, notably BlackRock’s iShares Bitcoin Trust (IBIT), which gained $272 million on the day — its third-biggest tally.

Update: BlackRock's numbers are in for the #Bitcoin ETF Cointucky derby. Third biggest inflow day for $IBIT yet at $272 million. Only -$76 million in net outflows for the day. https://t.co/ySE0edbz4c pic.twitter.com/RzgH6qn5Md

— James Seyffart (@JSeyff) January 23, 2024

“Volume on the Bitcoin ETFs remains very strong,” he added in a prior X post.

“Over $2 billion again today. $GBTC still making up a bit more than half. Total volume in the first 7 trading days is just shy of $19 billion.”

For popular crypto social media commentator MartyParty, meanwhile, there was light at the end of the tunnel.

ETF selling should now begin to ease, he argued on Jan. 21, as the initial turmoil following their launch gives way to a more steady uptrend.

"$2.135b of Shorts are set to get liquidated with a push to 42500," he noted in part of X commentary alongside liquidity data from on-chain analytics platform CryptoQuant.

"Binance will turn their attention to the short squeeze fueling a FOMO rally including participants from retail and the new institutional buyers."

Looking at the heatmap Im calling The Big Squeeze.

- @FTX_Official has sold out of $GBTC and $BTC and this will hit the media circuit.
- @binance is in court and their case may be thrown out by end of day, their Royal Flush is complete and leverage longs entered during the ETF… pic.twitter.com/WymX4jmIep

— MartyParty (@martypartymusic) January 22, 2024

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.