- The market anticipated a possible reduction in Bitcoin’s selling pressure.
- Traders remained cautious despite a decline in the Implied Volatility.
Despite the approval of institutional ETFs, Bitcoin’s [BTC] price stagnated over the last few weeks, causing FUD amongst traders and holders alike.
Chances of green?
According to an X (formerly Twitter) post by analyst Maartunn, Bitcoin has witnessed significant selling pressure over the past month, as indicated by the predominantly red candles on the net taker volume chart.
However, he noted that the prevailing trend indicated a gradual reduction in selling pressure, going forward. So, BTC could witness a brief respite or even a modest recovery soon.
😵Take a look at this chart..
It visualizes the immense selling pressure over the last month, with barely any green candles.
The selling pressure is decreasing at this point. Could it be time for a short breather or even a small recovery? pic.twitter.com/ZBfmeqJmS8
— Maartunn (@JA_Maartun) January 23, 2024
Bitcoin’s latest resistance levels also indicated a massive adjustment. Previously, a substantial resistance cluster was identified between $44,000 and $45,100.
However, there was a recent shift in these resistance walls, and they had gradually moved closer to BTC’s press time price levels.
If a reversal occurs in the future, traders would need to be careful of these levels before going long.
How are Bitcoin traders behaving?
Coming to trader behavior, it was seen that market sentiment had calmed down. Bitcoin’s Implied Volatility (IV) for significant periods had decreased, sitting at around 47% at press time.
However, the Volatility Risk Premium (VRP) and Skew stayed consistent with average levels.
For context, the VRP reflects the difference between anticipated and actual market volatility, providing insight into risk perceptions. Meanwhile, Skew measures the asymmetry in potential price movements.
The observation that VRP and Skew have remained consistent with average levels suggested stability in the market’s assessment of risk and potential price distributions.
At the time of writing, market sentiment remained uncertain, with a predominantly cautious attitude and fewer opportunities for significant profit.
Read Bitcoin’s [BTC] Price Prediction 2024-25
At press time, BTC was trading at $41,084.39, with its price having declined by 1.27% in the last 24 hours. The Total Amount of Holders had also declined during this period, sitting at 52.83 M.
Bitcoin’s MVRV Ratio also fell significantly, positioned at 45.5K at press time, showing that most holders were not holding profits.