Bitcoin has once again proven its unpredictable nature with a dramatic rebound from a recent low. After facing a downward trend over the past few hours, Bitcoin has bounced back, recovering from a low of $41,500. This sudden shift has sparked a flurry of activity among investors and analysts, with many closely monitoring the situation on Coinbase Spot around the $40K mark.
Bitcoin Triggers $6 Million In Liquidation
The rising trajectory of Bitcoin’s value has recently hit a plateau following a consistent rise over the past few months. As Bitcoin nears critical resistance points, particularly around the $45,000 level, there is a discernible dip in investor confidence, putting Bitcoin’s capacity to surpass these thresholds to the test. Consequently, this situation has opened doors for sellers to take advantage of opportunities in short selling.
Subsequently, the price of BTC dipped to a low around $41,500. This downturn was triggered by news that Barry Silbert, the founder and CEO of Digital Currency Group, along with Mark Murphy, the president of DCG, have resigned from their positions on the board of directors at Grayscale Investments.
A recent disclosure to the Securities and Exchange Commission by Grayscale Bitcoin Trust revealed that their resignations will be effective from January 1, 2024. This move comes amidst the SEC’s continuous scrutiny of GBTC’s bid to convert into a spot bitcoin exchange-traded fund.
Bitcoin has since significantly recovered from its recent low and is now poised to challenge its next resistance level. Data from Coinglass shows that Bitcoin instigated a total of $6 million in liquidations, with $4.4 million coming from short liquidations.
Notably, the ratio of long to short positions has been on a decline over the last few hours, now falling below 1, currently standing at 0.9194. This indicates that bears are gaining ground, accounting for 52% of the positions in the form of shorts, while bulls maintain 48% in long positions.
Despite this, traders are anticipating a potential ‘Santa Claus rally’ in the upcoming week. However, they remain cautious, particularly in light of the significant annual event of options expiry. Compounding these mixed sentiments is the possibility of the SEC greenlighting a spot Bitcoin ETF by January 10.
Analyst Eyes $40K Limit Bids
Analysts are now particularly interested in the limit bids around the $40,000 mark on Coinbase Spot, one of the leading cryptocurrency trading platforms. Adding to the intrigue is the observation that the closest actual supply for Bitcoin is hovering around $45,000. This figure is crucial as it could potentially act as a resistance level. If Bitcoin can sustain its momentum and break through this barrier, it could signal a more robust recovery and potentially higher valuations in the near future.
Market analysts are weighing in on this development with keen interest. Bitcoin’s rebound to over $41,500 showcases its staying power in a market that is increasingly acknowledging its value. However, investors should be mindful of the $45,000 supply level, as it could be pivotal for Bitcoin’s short-term trajectory.
Any rejection above that level might trigger a wave of selling activity among long-position holders, which might force BTC price to test $40K. Renowned venture capitalist Tim Draper has reaffirmed his prediction that Bitcoin will reach $250,000, expressing confidence in the imminent achievement of this target. “I believe we will see my $250,000 prediction materialize sooner rather than later,” Draper stated, further suggesting that once Bitcoin attains the $250,000 mark, its value is likely to surge even higher.
