After an impressive rally during the fourth quarter, Bitcoin’s (BTC) price has been signaling a possible reversal in the short term. The psychological resistance range between $42k and $44.5k has triggered heightened profit-taking from short-term holders and Bitcoin miners. Furthermore, Bitcoin dominance has slipped below the crucial support level of 52 percent after forming a weekly double top coupled with a bearish divergence of the Relative Strength Index (RSI).
Bitcoin Miners Reserve Declines
According to market data from CryptoQuant, Bitcoin miners’ reserves have been in a free fall since the beginning of December. Bitcoin miners hold about 1,834,447 BTC, following a 3000 coins sell-off in the past 24 hours. However, the miners’ sell-off has been significantly absorbed by MicroStrategy after Michael Saylor announced the company recently acquired 14,620 more Bitcoins.
Sell the News Narrative
With less than two weeks to the final decision of the Ark 21Shares Bitcoin spot ETF application, CryptoQuant has argued that astute crypto traders are likely to sell the news in a bid to capitalize on the hyped event. Notably, Ark 21Shares has submitted a fresh amendment to its application, thus triggering uncertainty surrounding approval.
Bitcoin price has been forming a daily double top coupled with a bearish divergence on the RSI, thus increasing the likelihood of reversal below $40k. Nonetheless, the imminent golden cross between the 50 and 200 Moving Averages (MA) signals the bulls are in control in the long term. Consequently, the anticipated Bitcoin correction could not be severe and long-lasting, especially with the fourth halving on the horizon.
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