Bitcoin closed its first week of 2024 with a focus on the $44,000 mark, displaying signs of narrowing volatility, which left the market in anticipation of upcoming catalysts.
Data from Cointelegraph Markets Pro and TradingView indicated a decrease in Bitcoin’s price fluctuations over the weekend.
One of the major factors contributing to market uncertainty was the impending decision on the approval or denial of the United States’ first spot Bitcoin exchange-traded fund (ETF), expected by January 10th.
This seminal event is widely anticipated to cause a temporary setback for bullish sentiment, possibly triggering a “sell the news” event.
On the flip side, some investors see the possibility of a knee-jerk upside move, challenging significant psychological price levels.
Regardless of the direction Bitcoin’s price may take, several indicators hinted at an impending breakout from the narrow intraday range.
Notably, the Bollinger Bands volatility indicator was tightening on daily timeframes, a classic precursor to range expansion.
Trader and commentator Matthew Hyland pointed out this development, emphasizing the tightening of Bollinger Bands as the ETF decision week approached.
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Another notable observation in the market was the resurgence of the “spot premium” on Bitcoin markets, indicating that derivatives traders were cautious about taking long or short positions following last week’s abrupt liquidations.
This caution could potentially lead to a buildup of positions with stop losses and liquidations clustered around the current price levels.
While all eyes were on the ETF decision, macroeconomic challenges were lurking on the horizon.
These challenges took the form of U.S. inflation data, with December’s Consumer Price Index and Producer Price Index readings expected in the coming days.
Historically, such data releases have caused short-term volatility in the cryptocurrency market and other risk assets.
However, for crypto investors, it was essential that the data continued to show a decrease in inflation, as this could delay any potential “pivot” in Federal Reserve interest rate policy.
Currently, such a pivot is not expected to occur at the Federal Reserve’s next dedicated meeting at the end of the month.
In conclusion, Bitcoin’s price remained relatively stable as it closed its first week of 2024, with market participants eagerly awaiting the decision on the first U.S. spot Bitcoin ETF and closely monitoring macroeconomic indicators for potential volatility in the days ahead.
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