Bitcoin Price As Bulls Plan Escape Betting On $42k Support, Time To Buy The BTC Dip?

After sustaining a downtrend for a few days, Bitcoin price is slowing flipping $42,000 into support ahead of springboarding towards $50,000. The largest crypto has continued to face increasing selling pressure post-spot BTC exchange fund (ETF) approval.

Bitcoin Price Prediction Post-Spot BTC ETF Green Light

Industry experts and analysts generally believe a few factors led to Bitcoin price dumping from highs at $49,000 to slightly below $42,000.

Some of these factors range from the overbought condition of the market, considering BTC’s surge from mid-October, investors’ withdrawal due to dismal performance after the ETF green light, and possibly the ongoing sell-off from Grayscale’s GBTC spot ETF following its conversion from the Bitcoin Trust (GBTC) investment product.

Despite the increasing outflows on Coinbase, analysts like James Van Straten, say that the spot BTC “ETFs are tier-1 products. Everything else is tier 2 or below; this will be evident in 12 months.

What’s Next For Bitcoin Price If $42k Support Holds?

Bitcoin achieved two minor but significant milestones on Monday starting with the uptick above the 50-day Exponential Moving Average (EMA) (in red) and S/R at $42,000.

Despite the Moving Average Convergence Divergence (MACD) indicator flashing a sell signal, bulls seem determined to turn the table. To achieve the desired move, Bitcoin price must hold above $42,000 as well as the 50-day EMA and the ascending trendline (black).

The uncertain state of the crypto market demands that traders stay alert, especially with the highlighted resistance areas at the 20-day EMA (blue), $45,000 and $48,000.

Blockchain data shows that there is significant potential selling pressure at the average price of $43,400 where 2.68 million addresses purchased 1 million BTC.

Should these BTC holders decide to sell at their breakeven point, resistance would spike, impeding further movement.

However, with 79% of all Bitcoin addresses currently in profit, Bitcoin price could hold firm and possibly consolidate in the range between $40,000 and $48,000 before the next breakout above $50,000 takes place.

It is worth considering that it could be too early to determine the direction Bitcoin takes as it is nowhere near out of the woods. For now, several daily candle closes are essential above $42,000.

Losing this level as a support coupon means that Bitcoin slides to $40,000. At this level, there’s a high chance BTC will extend the drawdown to $38,000.

The shrinking open interest (OI) in Bitcoin’s derivatives market highlights decreased risk appetite, especially among the bulls who were heavily liquidated following last week’s retracement.

According to Coinglass, the futures open OI has dropped to $17.45 billion after topping out at almost $20 billion. If this decline continues, it would mean that less money is flowing in while outflows increase, which would deprive Bitcoin price of the momentum to sustain the uptrend.

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