Bitcoin is back on $50,000 terms again

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Bitcoin price’s immediate reaction to the ETF’s first day of trading was a $3,000 pullback as traders withdrew funds on the sell-off news.

Minutes after the spot BTC ETF went live, its trading volume surged, reaching millions of dollars in trading within minutes and billions of dollars within hours. ETF expert Eric Balchunas said the numbers are “unreal” for the first day of trading, let alone the hours of trading.

Trading volume exceeded the $4.6 billion mark after the close of the first trading day Bitcoin Magazine reported.

Hopes of a Bitcoin price reaching $50,000 have been revived as trading volumes surge, despite the assumption of over-the-counter purchases.

According to CryptoQuant statistics, Coinbase’s BTC OTC trading volume reached $7.7 billion today, reaching the second highest level in history. This means that purchasing BTC through OTC trading may be related to the passage of spot BTC ETFs. Cryptocurrency Exchange BTC Daily Trading… pic.twitter.com/1zX31aJkqh

— Wu Blockchain (@WuBlockchain) January 11, 2024

It is important to note that OTC trading occurs outside of an exchange. In theory, they will not affect the price of Bitcoin. However, the presence of large buyers (or sellers) in the OTC market can tip the scales, causing rumors to spread. These leaked information will ensure that prices on exchanges are also affected. This explains the volatility in Bitcoin’s price, while also indicating demand pressure.

Bitcoin Price Outlook

From a 4-hour perspective, the price of Bitcoin was consolidating in an ascending parallel channel. The reaction of spot BTC ETF trading and US CPI inflation pushed the price of Bitcoin to exceed US$48,000, hitting the highest price of the day at US$48,969.

4-hour BTC price chart. Source: TradingView

On the daily time frame, Bitcoin price is trading within the weekly supply zone from $40,467 to $46,999. To confirm the continuation of the trend, BTC must convert this order block into a bullish breakout and confirm it with a breakout and close above the psychological level of $48,000.

Buying pressure above current levels could lead to a northward extension of Bitcoin price above the range high of $48,969. In a bullish scenario, upward momentum could push the largest cryptocurrency up 9% towards the psychological $50,000 level.

A relative strength index (RSI) above the neutral line of 50 indicates price strength. The index currently sits at 60 points, indicating there is still plenty of room to rise. In a similar manner, the Awesome Oscillator (AO) is in positive territory, indicating that bulls maintain a strong presence in the BTC market. All these factors support a bullish stance.

BTC price chart 1 day. Source: TradingView

Conversely, if selling pressure increases, Bitcoin price could head lower to test the confluence between the midline weekly supply zone at $43,916 and the 25-day exponential moving average (EMA). If Bitcoin continues to fall, it may find support at the 50-day moving average at $42,010. If buyers fail to hold this support, BTC could break through the supply barrier and test the 100-day EMA or key support below $37,800.

A break below $37,800 would take Bitcoin price to the 200-day moving average of $34,599.