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Bitcoin traders analyse recent price weakness and market sentiment

Bitcoin traders analyse recent price weakness and market sentiment

GrafaGrafa2025/01/13 05:50
By:Mahathir Bayena

Bitcoin's (CRYPTO:BTC) recent price fluctuations have drawn attention from traders, who are adopting a "player versus player" mindset in response to market conditions. 

Over the past week, Bitcoin experienced significant volatility, influenced by newly released U.S. economic data and rising Treasury yields. 

This culminated in a sharp correction in Bitcoin's price, which had rallied above $102,500 on January 6. 

Traders initially believed this upward movement had invalidated a potential head-and-shoulders pattern, mitigating fears of a dip below $90,000. 

However, the market sentiment shifted as rumors emerged that the U.S. Department of Justice received court approval to sell $6.5 billion worth of Bitcoin seized from Silk Road. 

This news contributed to bearish sentiment, prompting traders to adjust their strategies accordingly. 

“Snap decision based on headlines without deeper TLDR. This is the CT way,” commented Tony Stewart, an options trader, on the market's reaction to headlines.

He noted that bearish narratives could push prices lower until momentum shifts. 

Traders are also leveraging sentiment data and unconfirmed bearish events to their advantage. For instance, January 9 was a national day of mourning for former President Jimmy Carter, leading to reduced trading volumes and opportunities for strategic positioning.

Brian Russ, chief investment officer at 1971 Capital, emphasised the complexity of current market dynamics, stating that “the exact path is hard to define simply because of multi-variance.” 

He pointed out that Bitcoin's market cap makes manipulation more challenging than in previous cycles.

Russ also noted that while the Silk Road Bitcoin sales could impact volumes, their effect would likely be muted as the market has already priced in these events.

At the time of reporting, the Bitcoin price was $94,378.32.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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