Summary:
BTC's price action raises the question of whether the price weakness has ended or continues.
The long-legged Doji candle indicates potential downtrend exhaustion and a bullish reversal.
BTC rebounded from a low of $89K, closing at $94K, suggesting a possible bottom.
A decisive move above $95,900 is needed for confirmation of bullish sentiment.
Corporate demand for BTC exceeds supply, reinforcing bullish dynamics.
Bitcoin's Price Action: A Sharp Contrast to December
BTC's latest price action raises a crucial question for crypto traders: Has Bitcoin's (BTC) price weakness run its course, or is there more turbulence ahead?
On January 13, 2025, BTC experienced a notable recovery after dipping to intraday lows, contrasting sharply with the uptrend exhaustion observed in mid-December when prices peaked above $108,000.
Initially, BTC fell as investment banks adjusted their expectations for Fed rate cuts, leading to a decline below the key support zone of $90,000-$93,000. However, this breakdown was short-lived, and by the end of the day, BTC rebounded to $94,000, forming a classic "long-legged Doji candle". This pattern suggests downtrend exhaustion, indicating that although sellers initially pressured prices, buyers ultimately regained control. This is often seen as a potential signal of a bottom, especially when it occurs at critical support levels.
The emergence of the long-legged doji at the support zone indicates that BTC has consistently resisted further declines since late November. In stark contrast, on December 16, bulls failed to maintain prices above $108,000, printing a doji candle with a longer upper shadow, signaling an end to the uptrend.
Whatâs Next for Bitcoin?
While Monday's price action hints at a potential bottom, confirmation is necessary. A decisive move above the day's high of $95,900 is crucial for chart-driven traders to place fresh buy orders. Additionally, BTC's low near $89,000 has become a significant level for bears to target.
Demand-supply dynamics for BTC remain bullish, with corporate demand outpacing the supply of new coins this year, according to Andre Dragosch, Head of Research - Europe at Bitwise.
Price volatility may increase following the upcoming U.S. CPI report on January 15, which could affect Fed rate cut expectations.
Neal Wen from Kronos Research noted, "After Monday's sharp drop, Bitcoin rebounded from a low of $89K, as traders await the U.S. CPI report. Major altcoins followed suit, many experiencing greater losses in the last 24 hours. Market watchers are now focused on signs of stability to assess potential further downside or upside."
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