Nervousness is spreading like wildfire in the crypto community, raising doubts about the fact Bitcoin price will continue with the correction from its 2024 peak of $49,000 to below $40,000.
There was a modest price increase after the Securities and Exchange Commission (SEC) approved a number of spot BTC ETFs, but the short-lived trend faded, leaving the coin spiraling below $42,000 .
Although the bulls addressed the bearish situation this week by supporting the price above $43,000, their influence did not last long considering an ongoing correction to $42,370.
According to popular analyst Michaël van de Poppe, with over 685,000 followers on
#Bitcoin is eager to consolidate within this range, while the ETF hype is slowly fading.
The ETF launch was one of the best performing launches in terms of net inflow and volume, and it will be seen in the coming years.
Potential resistance at $46,000 and support at $39-41,000. pic.twitter.com/Ggx3cteN3v
— Michaël van de Poppe (@CryptoMichNL) January 17, 2024
Despite the mundane price action after approval, many analysts and experts like it Bloomberg’s Eric Balchunas pointed out that the Bitcoin ETF has emerged as one of the best performing launches in terms of net inflow and volume. Many believe that the ETF’s impact will be seen in the coming years.
I would like to put into context how insane $10 billion volume is in the first 3 days. There were 500 ETFs launched in 2023. Today they have done a COMBINED volume of $450 million. The best grossed $45 million. And many have had months to move forward. $IBIT alone is seeing more activity than the entire freshman of ’23… https://t.co/wV1zQFtPW1
— Eric Balchunas (@EricBalchunas) January 16, 2024
How to deal with Bitcoin price correction and market uncertainty
Pressure is mounting on Bitcoin to break out of lower levels below $42,000. The largest cryptocurrency is trading below all three major MAs applied to the four-hour chart, starting from the 20 Exponential Moving Average (EMA) (blue), the 50 EMA (red), and the 200 EMA (purple ) which force holders to remain ahead, they don’t know whether to sell immediately or hold out until BTC finally figures out the next move.
Support in the yellow band will continue to play a vital role in Bitcoin’s technical outlook. A bounce from this area would raise the stakes for the bulls. This, combined with renewed interest, could create a suitable environment for an expected climb towards $50,000.
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Bitcoin Price Chart | Tradingview
Based on the Moving Average Convergence Divergence (MACD) indicator, which is likely to send a sell signal, Bitcoin price is likely to be accepted in the lower narrow range between $38,000 and $42,000.
Increased exchange inflows, on the other hand, could further hinder Bitcoin’s performance. Data shared on X by James Van Straten highlighted a massive inflow of 86 BTC, the second largest on Coinbase.
Two-week view of #Bitcoin net inflows/outflows via @coinbase, at 10 minute resolution.
On Friday we saw a #Bitcoin inflow of 86,000, the second largest ever on the exchange. pic.twitter.com/RecMebkRqL
— James Van Straten (@jvs_btc) January 17, 2024
When investors prepare to sell, they move their holdings into the stock market. This action has the potential to significantly intensify selling pressure, leading to further distress.
However, investors may be preparing for the next big event: the Bitcoin halving. Miner rewards would be halved in April, significantly reducing supply.
The impact of the halving, which has historically led to parabolic breakouts in Bitcoin’s price, is expected to be even more powerful if BTC ETFs gain traction by increasing demand.
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