BTC bulls feel the recovery below $39,650 was the bottom. While bears caution that an approaching death cross on the daily chart signals further downside. The price of Bitcoin (BTC) jumped beyond $43,100 in the U.S. trading session, but traders remain cautious on Jan. 11, and both bulls and bears are divided on this week’s plunge to $39,650 and whether it was the BTC’s bottom or not. As the global financial markets absorbed U.S. Federal Reserve Chair Jerome Powell’s pronouncements on anticipated fiscal policy changes, the price of Bitcoin has traded tightly around $42,000, according to data.
Powell stated that the central bank is willing to “increase interest rates more overtime” if inflation remains high. But experts were quick to point out that Powell made further remarks, implying that the low-interest environment might last for some time. Traders likely took these remarks favorably. While it’s impossible to link Powell’s words to specific price moves, BTC did manage a rapid climb above $43,000.
Powell stated, “It’s past time for us to transition from emergency pandemic mode to a more regular state. From here, it’s a long way back to normal.”
Bulls Push the Market
The crypto market is infamous for its volatility and history of large drawdowns when new all-time highs have been set, a feature underlined by ChrisBTCbull, a pseudonymous Twitter user.
BTC has lost roughly 40% of its value. Meanwhile, Dogecoin (DOGE) has lost 79% of its value since its highs. Yet bullish analysts believe the market has struck a bottom.
Bitcoin is “entering the Buy Zone on Dormancy Flow,” according to crypto expert and Twitter user Will Clemente III, as shown on the accompanying Bitcoin entity adjusted dormancy flow chart, which “basically compares price to spending behavior.”