Bitcoin (BTC) circled $44,000 into the Dec. 21 Wall Street open as analysis said that a BTC price correction was “necessary.”
$48,000 marks BTC price "topside resistance"
Data from Cointelegraph Markets Pro and TradingView confirmed Bitcoin trading beyond its previous one-week range.
A breakout had occurred the day prior, with BTC/USD reaching highs of $44,300 before reversing.
Still up over 6% week-to-date, the largest cryptocurrency nonetheless gave some market participants pause for thought.
“Although a correction seems necessary, BTC chart continues to look very strong on all timeframes,” trading team Stockmoney Lizards wrote in part of its latest market update on X (formerly Twitter).
“BTC is forming an ascending triangle with another retest of the upper resistance line (~44k).”
Like many others, Stockmoney Lizards focused its attention on the upcoming decision on the United States’ first Bitcoin spot price exchange-traded fund (ETF) due by Jan. 10.
“It is likely that BTC will continue to pump and break the upper trendline until an ETF decision is made,” it continued, giving a near-term upside target of $48,000.
The announcement itself, even if positive, could nonetheless turn out to be a “buy the rumor, sell the news” event, the analysis warned. In this, Cointelegraph reported, Stockmoney Lizards is far from alone.
“As we finally approach the launch, we need to point out that it is likely that the actual demand for the BTC Spot ETF at the start will fall short of market expectations,” trading firm QCP Capital agreed in its own market update on Dec. 21.
“This sets up a classic ‘sell the news’ scenario in the 2nd week of Jan. For this reason, we expect topside resistance for BTC in the 45-48.5k region and a possible retracement to 36k levels before the uptrend resumes.”
A correction would be "good" for Bitcoin markets
The mid to late $30,000s remains a popular area in terms of where a potential retracement could take the market.
Related: 2 risks around Bitcoin ETF launch that no one’s talking about
“The chart looks heated up and a correction would be good. A drop below $40k could liquidate some leveraged long positions and lead to retracement towards $38k,” Stockmoney Lizards concluded.
“Arguments in favour of this scenario would be the rally that needs correction, year-end sales (tax loss selling) and reduced trading activity due to the holidays.”
Many #Bitcoin short liquidations are accumulating on the upside once more. pic.twitter.com/ojC6K2j3Cr
— Mister Crypto (@misterrcrypto) December 21, 2023
While the update called such a scenario “less likely” than others, market data showed traders poorly positioned even for the latest push above $44,000.
According to statistics resource CoinGlass, Dec. 20 liquidated over $100 million in crypto short positions — the most in two weeks. BTC short liquidations totaled $38.5 million.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
