Was $39,650 the bottom? Bitcoin bulls and bears debate the future of BTC price

Bitcoin
(BTC)
price
made
a
quick
pop
above
$43,100
in
the
U.S.
trading
session
but
uncertainty
is
still
the
dominant
sentiment
among
traders
on
Jan.
11
and
bulls
and
bears
are
split
on
whether
this
week’s
drop
to
$39,650
was BTC’s bottom. 

Data
from

Cointelegraph
Markets
Pro

and

TradingView

shows
that
the
price
of
Bitcoin has
traded
tightly
around
the
$42,000
level
as
the
global
financial
markets
digested
U.S.
Federal
Reserve
Chair
Jerome
Powell’s
statements
on
the
upcoming
fiscal
policy
changes.


BTC/USDT
1-day
chart.
Source:
TradingView

Powell indicated
that
the
central
bank
is
prepared
to
“raise
interest
rates
more
over
time”
if
inflation
continues
to
persist
at
high
levels,
but
analysts
were
quick
to
note
further
comments,
suggesting
that
a
low-interest
environment
could
persist
for
some
time.

It’s
possible
that
traders
may
have
interpreted
these
comments
positively
and
while
it
is
not
possible
to
connect
Powell’s
comments
to
direct
price
movements,
BTC
did
manage
a
quick
surge
above
$43,000.

Powell
said, 

“It
is
really
time
for
us
to
move
away
from
those
emergency
pandemic
settings
to
a
more
normal
level.
It’s
a
long
road
to
normal
from
where
we
are.”

Here’s
a
look
at
the
ongoing
debate
on
whether
the
crypto
market
is
positioned
to
head
higher
in
the
coming
days.

Bulls
call
the
bottom

The
crypto
market
is
well
known
for
its
volatility
and
history
of
extensive
drawdowns
after
new
all-time
highs
have
been
established,
a
characteristic

highlighted

by pseudonymous
Twitter
user
ChrisBTCbull.


Cryptocurrency
drawdown
percentage
from
2021
highs.
Source:
Twitter

This
across-the-board
drawdown
saw
BTC
fall
by
nearly
40%,
while
Dogecoin
(DOGE)
is
down
79%
from
its
highs,
but
according
to
bullish
analysts,
recent
technical
developments
suggest
that
the
market
has
reached
a
bottom.

According
to
crypto
analyst
and
Twitter
user
Will
Clemente
III,
Bitcoin
is
“entering
the
Buy
Zone
on
Dormancy
Flow”
as
highlighted
on
the
following
Bitcoin
entity
adjusted
dormancy
flow
chart,
which
“essentially
compares
price
to
spending
behavior.”


Bitcoin
entity-adjusted
dormancy
flow.
Source:
Twitter

Clemente
said,

“This
bottoming
signal
has
only
flashed
5
times
before
in
Bitcoin’s
history.”



Related:




Bitcoin
price
surges
to
$43K,
but
traders
warn
that
‘real
pain’
is
due
for
altcoins

A
Death
Cross
looms

Despite
Jan.
11’s
spike
to
$43,100,
many
analysts
are
pessimistic
about
Bitcoin’s
short-term
prospects
and
caution
that
a
potential
“death
cross”
on
the
daily
chart
has
historically
been
a
strong
bearish
indicator.

As

shown

below,
the
50-day
moving
average
is
perilously
close
to
falling
below
the
200-day
moving
average,
a
convergence
that,
in
the
past,
resulted
in
sharp
price
declines.


BTC/USD
1-day
chart.
Source:
Twitter

Bitcoin
Archive
said,

“Bitcoin
is
approaching
the
“Death
Cross.”
The
last
time
this
happened
in
June
the
price
dropped
20%
more
over
31
days.
That
would
take
us
down
to
$34K
by
the
9th
of
Feb
if
this
repeated.”

As
for
the
altcoin
market,
the
recent
price
weakness
in
the
USD
and
BTC
pairs
was
addressed
by
analyst
and
pseudonymous
Twitter
user
Pentoshi,
who
posted
the
following
tweet
suggesting
a
more
bearish
performance
in
the
near
term
for
alts.

For
the
time
being,
traders
appear
content
to
play
the
waiting
game
to
see
if
the
crypto
market
reverses
course
of
stays
range-bound
for
the
foreseeable
future.

The
overall
cryptocurrency
market
cap
now
stands
at
$1.998
trillion
and
Bitcoin’s
dominance
rate
is
40.3%.

The
views
and
opinions
expressed
here
are
solely
those
of
the
author
and
do
not
necessarily
reflect
the
views
of
Cointelegraph.com.
Every
investment
and
trading
move
involves
risk,
you
should
conduct
your
own
research
when
making
a
decision.

read original article here