BTC price analysis sees $38K next if Bitcoin fails to rally bulls

Bitcoin (BTC) saw new seven-week lows into the Jan. 22 daily close as traders warned that worse was to come.

BTC/USD 1-day chart. Source: TradingView

Hayes on BTC price downside: “Still more to go”

Data from Cointelegraph Markets Pro and TradingView showed a BTC price drop to $39,440 sparking only a modest recovery.

The largest cryptocurrency faced consistent sell-side pressure from sources, including the Grayscale Bitcoin Trust (GBTC), the largest Bitcoin institutional investment vehicle, as part of consumer rotation among new spot Bitcoin exchange-traded funds (ETFs).

Now down up to 20% versus January’s highs, BTC/USD gave little inspiration to traders, some of whom predicted new losses as liquidations mounted.

“Still more to go …,” Arthur Hayes, former CEO of crypto exchange BitMEX, summarized on X (formerly Twitter).

Keith Alan, co-founder of trading resource Material Indicators, shared the sentiment.

Uploading a chart of long and short signals from one of the platform’s proprietary trading tools, he warned that bulls needed to “build some momentum” at current prices near $40,000. If not, a return to $38,000 could be next.

A separate chart showing BTC/USDT bid liquidity for the largest global exchange, Binance, meanwhile highlighted bidder interest immediately below the spot lows — but with sellers absent until $44,000.

Material Indicators additionally noted a class of Bitcoin whales making sustained purchases throughout the past month, these mounting to $800 million.

BTC/USDT order book liquidity for Binance. Source: Material Indicators/X

“Big squeeze” seen following GBTC cooldown

Charting the ongoing state flux among the fledgling spot ETFs, Bloomberg Intelligence analyst James Seyffart suggested that GBTC was not yet out of the woods when it came to BTC sales.

Related: Are BTC longs waiting for sub-$40K? 5 things to know in Bitcoin this week

GBTC sold a total of $640 million in Bitcoin on Jan. 22, canceling out previous signals that sales were slowing.

Seyffart nonetheless noted increasing inflows to other ETFs, notably BlackRock’s iShares Bitcoin Trust (IBIT), which gained $272 million on the day — its third-biggest tally.

“Volume on the Bitcoin ETFs remains very strong,” he added in a prior X post.

“Over $2 billion again today. $GBTC still making up a bit more than half. Total volume in the first 7 trading days is just shy of $19 billion.”

For popular crypto social media commentator MartyParty, meanwhile, there was light at the end of the tunnel.

ETF selling should now begin to ease, he argued on Jan. 21, as the initial turmoil following their launch gives way to a more steady uptrend.

“$2.135b of Shorts are set to get liquidated with a push to 42500,” he noted in part of X commentary alongside liquidity data from on-chain analytics platform CryptoQuant.

“Binance will turn their attention to the short squeeze fueling a FOMO rally including participants from retail and the new institutional buyers.”

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.