Bitcoin (BTC) started the critical data week with a decline as discussions of a possible rate hike arose following Friday’s employment data, and major banks adjusted their expectations for Fed rate cuts.
Initially, the BTC price dropped below $90,000, but this decline was short-lived. By the end of the day, BTC had formed a classic “long-legged Doji candle” and returned above $94,000.
Experts analyzing Bitcoin’s recent price movements observed that the long wick formed on the BTC chart indicated the exhaustion of the downtrend and the triumph of buyers over sellers.
These experts pointed out that a similar doji candle occurred on December 16, when the bulls failed to maintain the price at record levels above $108,000, resulting in a subsequent decline. They emphasized that this doji candle on December 16 signaled the exhaustion of the uptrend and the deepening of the decline.
According to experts, this pattern is often interpreted as a potential bottom signal, with investors questioning whether Bitcoin’s price weakness has ended or if further decline is to be expected.
However, experts cautioned that although yesterday’s price movements suggest a potential bottom for Bitcoin, it should remain stable above the daily peak of $95,900 for some time.
Andre Dragosch, the Head of Bitwise European Research, highlighted in his analysis that Bitcoin’s supply and demand dynamics strongly favor buyers, which reinforces the bullish fundamentals.
Neal Wen, the Head of Global Business Development at Kronos Research, informed Coindesk that after Monday’s sharp decline, Bitcoin rebounded from its lows of $89,000 as investors await the US CPI report on January 15. Wen also noted that major altcoins have followed suit, with many recovering in the past 24 hours.
Wen emphasized that macroeconomic data will play a decisive role in Bitcoin prices going forward, and market watchers are now focused on signs of stability to determine whether further declines or increases are expected.
*Not investment advice