Bitcoin bottom or Bitcoin bounce – Buy the dip or wait it out?

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Last Updated on 20 January 2024 by CryptoTips.eu

In a week’s time, Bitcoin has dropped by some 10%. Calculated since the temporary top of $49,000, one could even argue that yesterday evening (Central European Time) we touched a 20% low since that weekly high, as Bitcoin momentarily touched $40k then. At the time of writing, Bitcoin is trading at $41,6k.

The euphoria over last week’s Bitcoin ETF (exchange traded fund) approval has given way to concerns about the global economy and geopolitical developments that are also pushing stock markets lower (at least in Europe and Asia, in the US they were boosted by new economic data and were able to hit a new high, although worries remain).

So where do we go from here?

Advertentie.

Iran and Pakistan

On the 9th of January I stated:

If the American stock market watchdog SEC approves one of the many ETF applications tomorrow, there will be two options for the price of the largest digital currency in the short term. Either it falls during a so-called ‘sell the news’ crash to a level of (probably) $38,000, where there is a lot of support, or it immediately rises to $50,000.

So we first got the rise to $49,000 (because of the sudden euphoria) and are now on the decline to find support, not helped by this week’s geopolitical stories (just think of the bad economic news coming out of China, Trump’s victory in Iowa and the possible war between Iran and Pakistan, although I don’t think that will actually happen).

As Wall Street is also investing in Bitcoin, the correlation of the largest digital currency with global stock market exchanges has only grown, and so Bitcoin has a hard time reaching higher levels whenever global stock markets are under pressure and when geopolitical conditions are not optimal.

But partly due to the knowledge that we will have a halving later this year, there is a lot of support for Bitcoin at certain levels.

Normally (also according to many analysts) we will look for temporary support between $38,000 and $40,000 before a ‘bounce’ starts, but of course a lot also depends on what happens in other countries (especially in the current wars).

Sideline is probably best but know that a bounce could erupt at any moment. Has that bounce started yesterday? I await confirmation of the candles before making a move. Watch out for high volume and a big step up. Happy trading.

Jeroen Kok

Jeroen is one of the lead copywriters on Cryptotips.eu and discusses all recent events in the crypto market. This includes news updates, but also price analyzes and more. He developed his passion for cryptocurrency during the bull run in 2017. He has learned a lot since then. The combination of cryptocurrency and creative writing is perfect for Jeroen and an excellent way to share his knowledge with a wide audience. Find me on LinkedIn / [email protected]
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