'Most Important' Period for Bitcoin (BTC) Traders, Highlighted by Skew Analytics
LearnTrade.ca -- Year's beginning for Bitcoin is often viewed as a critical time period, where the tone for the rest of the year is set, and for traders, it is a time marked by heightened volatility and planning.
The yearly opening is essentially the price at which Bitcoin starts trading on the first day of the year. It sets a psychological benchmark for traders, acting as a reference point for gauging market sentiment and performance over the year.
BTC/USD chart to this level can be particularly important as they often serve to test the strength and resilience of the ongoing market trend. If the price bounces off this level, it can reinforce the notion that the market is bullish, potentially leading to increased buying pressure. Conversely, a breakdown below the yearly open can signal bearish sentiment, possibly leading to further declines.
A comprehensive analysis of the Bitcoin chart indicates that the asset has experienced significant volatility, with prices swinging between bullish surges and bearish pullbacks. The moving averages are converging, which typically suggests a period of consolidation as the market decides on its next major move. The current price hovers around $42,507, with the yearly opening acting as a critical pivot point.
According to top market analyst Ali Martinez, this price level might prove to be significant for traders looking at a longer-term opportunity to flip the coin.
Taking to X, Martinez noted that the Bitcoin Market Value to Realized Value (MVRV) ratio has fallen below its 90-day average over the past 12 months. This signal, according to the analyst, presents a "buy-the-dip" opportunity.
The accompanying chart in the post showed that previous buy-the-dip moments are typically followed by a period of intense growth that leads to a lower high. The projection to buy the dip is an ambitious call, especially as investors are still dragging a price drawdown in Grayscale Bitcoin Trust (GBTC) through the transfer of their shares.
The market has been largely unstable, with Bitcoin liquidating bears on some occasions and reversing growth on other days. In all, the buy-the-dip moment might favor investors who are ready to ride the coin’s current volatility trends until it attains stability.
Growth scenario for Bitcoin
In the bullish scenario, if the price finds solid support at the yearly opening and demonstrates a strong bounce-back, it could signify underlying market strength. This could potentially lead to a rally toward the first major resistance level, which may be at approximately $44,000, aligning with the 50-day moving average. A breakout above this level could see Bitcoin aiming for the $46,000 mark, near the 200-day moving average.
With sustained trading volumes and positive market sentiment, Bitcoin might target the psychological level of $50,000. This would represent a significant recovery and could also instigate a positive feedback loop, attracting more investors to the market.
Bitcoin halving as major catalyst
Since the advent of spot Bitcoin Exchange Traded Fund (ETF) products failed to impact the price of BTC, many investors are already shifting their focus to the impact of Bitcoin halving on the market.
The event, slated to be held sometime in April, might ultimately shrink the supply of the asset. According to Samson Mow, this supply shortage and the massive increment in demand from BlackRock (NYSE:BLK) and Fidelity Investments will trigger a major upshoot in the price of Bitcoin in the near future.
Other top market experts are also optimistic that the halving event will catalyze the Bitcoin price beyond its previous all-time high (ATH) soon.