Updated January 24th, 2024 at 12:35 IST

Crucial for Bitcoin to hold above $38,500: Experts

ETH has lost more than 13% of its value in the last 7 days and currently trades at $2,225 with a 5% dip in the last 24 hours.

Reported by: Anirudh Trivedi
Bitcoin | Image:Unsplash

Crypto market overview: Last month has been a roller coaster ride for crypto investors as the market has seen major swings on both sides of the price spectrum. Bitcoin, which has lost more than 7 per cent in the last 7 days has shown strong support near $38,500 and currently trades at $39,712. 

On the other hand, ETH has lost more than 13 per cent of its value in the last 7 days and currently trades at $2,225 with a 5 per cent dip in the last 24 hours. 


The Crypto Fear and Greed Index also fell drastically over the last week and currently hovers at 48 points in the neutral zone. 


Image credit: Alternative.me


Underlining a major support level for Bitcoin, CoinSwitch markets desk said, “BTC seems to have found the first level of strong support at $38,500 as a two-week long sell-off post-ETF approval continues to keep new crypto investors from participating. It is worth noting that the next big support for BTC lies directly around the $32,00 mark so it is very important for the bulls to hold the $38,500 mark.” 

“While investors are turning fearful for the Bitcoin support to not hold with more than 300 million dollars worth of liquidations in the last 24 hours as per the data from Coinglass, a U-shaped recovery to take Bitcoin back to near $50,000 is still a possibility,” CoinSwitch added. 


Rajagopal Menon, Vice President, WazirX shared that the recent price declines for Bitcoin have eliminated profits for short-term investors, amplifying the broader market downturn. Menon said, “Short-term holders, especially those who acquired Bitcoin in the past month, are now exiting with losses. This notable decrease in average profits for short-term holders could indicate heightened selling pressure or impending liquidity exits in the near term.

“Analysing the technical indicators, the Hourly MACD for BTC/USD is currently decelerating within the bearish zone. Meanwhile, the Hourly RSI (Relative Strength Index) has surpassed the 50 level. Key support levels to watch are at $39,400, followed by $38,500. Notably, the resistance levels include $40,350, $40,450, and $40,850,” added Menon. 


Investors creating new positions

Citing ETFs as easy-to-exit instruments, Shivam Thakral, CEO of BuyUcoin believes that the ongoing selling pressure is the result of users liquidating their positions to book profits and creating new positions anticipating the next rally. Thakral said, “Bitcoin and Ether dropped by roughly 1 per cent and 6 per cent respectively which resulted in a 2.14 per cent drop in the overall crypto market cap. The next market mover can be the rate cut announcement by the US Fed which it signalled at the end of 2023.” 


Sharing the key support levels for Ethereum, CoinDCX Research Team said, “BTC found support at the 100 EMA Daily, a positive sign if it continues to rise from this level. ETH, on the other hand, is at a key support level but is yet to show signs of recovery. Critical support levels for ETH include $2,170, $2,125, and notable support coinciding with the 200 EMA D at $2,016.”

Future outlook

Sharing the resistance and support levels for Bitcoin charts, Edul Patel, CEO, Mudrex said, “Bitcoin continues to trade below the crucial $40,000 threshold, currently undergoing correction at $39,700 after a recent dip. The present trading level may attract increased buying interest, given the support at $38,500. In case of a support breakdown, the next support is anticipated at the $37,800 level, while resistance on the upside is positioned at $40,350.”

Vikram Subburaj, CEO, Giottus said, “Bitcoin had a volatile day while altcoins have turned bearish. Bitcoin declined to $38,500 overnight before rallying back to $40,000 - possibly a case of market manipulation by large holders including GBTC. As this played out, key altcoins including Ethereum, BNB and Cardano, have shed more than 3 per cent. BTC dominance continues to rise this week and is nearing 52 per cent.”


“Bitcoin needs to find support above $38,000 and reclaim $40,000 comprehensively for altcoins to gain a rally on confidence. If $38,000 is breached, $36,000 becomes the next target for the top crypto asset. Support zones for altcoins: Ethereum ($2,200), Solana ($80), BNB ($290), Avalanche ($27) and Cardano ($0.44),” added Subburaj. 


Published January 24th, 2024 at 11:37 IST