Bitcoin Traders Long The $39K Dip, Will BTC Head In The Expected Direction?

Rejected again when it tried to reclaim the $40,000 area, Bitcoin is trading just north of $39,000. The first cryptocurrency by market cap is moving in a low time frame between the mid-range of its current levels and around $48,000.

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In higher time frames, Bitcoin seems to be stuck between the low $30,000 and the high $60,000. Whenever it approaches, traders turn to great fear of high levels of greed.

At the time of writing, Bitcoin is trading at $39,300 with losses of 3% and 7% respectively in the past 24 hours and 7 days.

BTC is moving sideways on the 4-hour chart. Source: BTCUSD trading summary

Data from analyst Ali Martinez suggests that traders have yet to enter fear territory as the price of BTC still remains at current levels. A majority of operators seem optimistic.

As can be seen below, the ratio of long to short on crypto exchange Binance stands at 2.88, meaning traders are dominantly long. About 74% of traders on this platform took long positions instead of 25%.

Source: Ali Martinez via Twitter

In that sense, Martinez advised traders to remain cautious as Bitcoin rarely does what the majority expects. While the price of the first cryptocurrency looks set to recover in a short period of time, bulls have yet to show conviction.

the analyst added the following about possible support levels for the price of BTC in case of more setbacks:

Bitcoin’s last line of defense is the Fibonacci retracement level of 78.6% at $38,530. If this support level is crossed, USD BTC could fall as low as $32,853 or even $26,820.

Data from Material Indicators (MI) support these potential levels. As can be seen below, Bitcoin’s price bounced off a stack of bid orders (in yellow below the price) which was set at around $39,000.

The benchmark crypto then moved up, but with little support at its current levels in the event of another increase in selling pressure to $38,000. Just like when BTC saw support at $39,000, there are about $10 million worth of bid orders at those levels.

The price of BTC (blue on the chart) bounces on support (bids in red and yellow below the price). Source: Material Indicators

Bitcoin Fundamentals Suggest Up, But BTC Price Remains Low

Bitcoin’s price range has tightened in recent months. A capitulation event, a price action that takes the price out of range, looks imminent.

Additional data from Martinez reports a significant decline in the supply of BTC on exchange platforms. This statistic is at its lowest point in a year with an ongoing downward trend.

Despite the tight supply, Bitcoin’s price seems more tied to macroeconomic factors. The rise in interest rates by the US Federal Reserve (FED) and the war between Russia and Ukraine are among the most important.

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As NewsBTC reported, if the FED becomes aggressive on its monetary policy, the price of BTC could retest the bottom of its range or a lower trend.

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