On December 21st, Bitcoin made headlines as it surged to around $44,000 just before the Wall Street opening bell. Experts had been anticipating a correction in the Bitcoin price, and this move seemed to confirm their expectations.
Market data from Cointelegraph Markets Pro and TradingView revealed that Bitcoin had broken out of its one-week trading range.
A day earlier, it reached a high of $44,300 before experiencing a reversal. Despite this correction, Bitcoin had still managed to maintain a 6% increase for the week.
Stockmoney Lizards, a trading team, noted in their latest market update on social media platform X (formerly Twitter) that although a correction seemed necessary, Bitcoin’s chart remained strong across all timeframes.
They also observed that Bitcoin appeared to be forming an ascending triangle with a retest of the upper resistance line around $44,000.
Like many in the crypto community, Stockmoney Lizards were closely watching the upcoming decision regarding the United States’ first Bitcoin spot price exchange-traded fund (ETF), scheduled for January 10th.
They believed that Bitcoin could continue to rise until the ETF decision was announced, setting a near-term target of $48,000.
READ MORE: Spot Bitcoin ETF Approval: A Potential Game-Changer on Wall Street, Says Michael Saylor
However, they also cautioned that even if the announcement was positive, it might trigger a “buy the rumor, sell the news” event.
This sentiment was echoed by trading firm QCP Capital, which anticipated a “sell the news” scenario in the second week of January, regardless of the ETF outcome.
QCP Capital expected Bitcoin to face resistance in the $45,000 to $48,500 range and potentially retrace to levels around $36,000 before resuming its uptrend.
While Stockmoney Lizards considered this scenario less likely, they pointed out that the market was in a heated state and a correction could be beneficial.
They suggested that if Bitcoin dropped below $40,000, it might lead to the liquidation of leveraged long positions and a retracement towards $38,000.
Factors such as the need for a correction after a rally, year-end sales (tax loss selling), and reduced trading activity during the holidays supported this argument.
Despite these various scenarios, market data indicated that many traders were poorly positioned for Bitcoin’s recent push above $44,000.
On December 20th, over $100 million in crypto short positions were liquidated, including $38.5 million in Bitcoin short positions, according to statistics from CoinGlass.
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