The upward momentum of Bitcoin’s price has paused after a steady increase over recent months. As it approaches key resistance levels, notably around the $45K mark, there’s a noticeable decline in buyer confidence, challenging BTC’s ability to break through these levels. This has prompted sellers to capitalize on short-selling opportunities. Amidst this, both investors and traders find themselves in uncertainty, debating whether this signals a potential downturn or is simply a temporary consolidation.
BTC Declines Following Turmoil In Grayscale
Today, the price of Bitcoin experienced a decline as traders closed their long positions in response to rising funding rates, shifting market sentiment from positive to negative. Data from Coinglass reveals that Bitcoin witnessed a total liquidation of nearly $29.6 million, out of which $24 million was from long-liquidation.
The downward trend in Bitcoin’s value became more pronounced following the announcement that Barry Silbert, founder and CEO of Digital Currency Group, and Mark Murphy, the president of DCG, have stepped down from their roles on the board of directors at Grayscale Investments.
According to a recent filing by Grayscale Bitcoin Trust with the Securities and Exchange Commission, their resignations will become effective from January 1, 2024. This development follows the SEC’s ongoing review of GBTC’s application to transform into a spot bitcoin exchange-traded fund.
This news triggered a wave of long-liquidation; however, BTC price is now finding a stable region to hold its momentum. Currently, there’s a strong battle between the bulls and bears near $42K as the long/short ratio trades at 1.
However, traders are expecting a Santa Claus rally in the coming week, yet they are also cautiously eyeing the significant yearly event of options expiry. Adding to this mixed sentiment is the possibility of the SEC approving a spot Bitcoin ETF by January 10.
What’s Next For BTC Price?
Bitcoin has hit a significant resistance point near $44,500, encountering strong opposition from bearish traders. BTC price is now declining and it has recently touched the EMA100 trend line on the 4-hour chart. As of writing, BTC price trades at $42,304, declining over 2.8% from yesterday’s rate.
The declining moving averages hint at a sellers’ advantage with the relative strength index (RSI) showing a negative divergence by trading at 32-level. A definitive sign of a bearish turn would be Bitcoin closing below the ascending support line, currently at $41,500. Should this occur, the BTC price might see a decline to $40,000.
On the flip side, if Bitcoin rebounds from its current position or support line and breaks through the EMA20 and $44,700 level, it could signal the start of a new upward trend. In such a scenario, the price might surge towards $48,200, with a potential further climb to the $50,000 mark.