The dominant sentiment of doom and gloom in the crypto market shifted toward hope on Jan. 25 after the price of Bitcoin (BTC) climbed to $37,500 briefly as stock markets staged a midday rally that recovered most of the losses from Jan. 24.
Even with Jan. 25's recovery, global markets remain in a state of flux, primarily due to uncertainty over the U.S. Federal Reserve’s plan to raise interest rates in the coming months, with the latest signal indicating that the first rate hike will come in March.
Data from Cointelegraph Markets Pro and TradingView shows that Bitcoin bulls reclaimed the $36,000 level early on Jan. 25 and managed to claw their way above $37,500 before a closing-bell pullback in equities markets weighed on BTC price.
BTC/USDT 1-day chart. Source: TradingViewHere’s what several analysts are saying about this latest move for Bitcoin and whether it’s the start of a sustainable rally or a bull trap that is destined to push the price back into the low $30,000s.
$34,000 is a crucial level to hold
The significance of the recent price bounce off of $34,000 was addressed by on-chain data firm Whalemap, who posted the following chart highlighting the bounce off of the “whale” trendline.
Bitcoin realized price by address. Source: WhalemapWhalemap said,
“Perfect bounce for Bitcoin on the daily. $34,000 is now crucial to hold.”According to the chart posted by Whalemap, should $34,000 fail to hold, the next major support level is found near $25,000.
Volatility ahead of the FOMC meeting
The issue of concern ahead of the Federal Open Market Committee (FOMC) meeting was addressed by market analyst and Cointelegraph contributor Michaël van de Poppe, who posted the following chart highlighting the “nice flip of $36,000” and suggested that now the market is “looking for a continuation to $38,000.”
BTC/USDT 1-hour chart. Source: TwittervanPoppe said,
“However, all very tricky still with the FOMC meeting coming up tomorrow, as volatility will probably remain high on Bitcoin and the markets.”Related: Is the bottom in? Data shows Bitcoin derivatives entering the ‘capitulation’ zone
An old CME gap wa filled
One final observation about the latest move in the market was offered by independent market analyst Scott Melker, who posted the following Bitcoin CME futures chart and pointed out that the recent dip in BTC filled a gap that goes back to July 2021.
BTC CME futures. 1-day chart. Source: TwitterMelker said,
“Not a huge believer in the CME gap narrative, but this was an epic fill. Almost to the dollar.”A slightly different take on the narrative that the bull market is now coming to a close was offered by the crypto trader and pseudonymous Twitter user PlanC, who posted the following weet suggesting that the bear market actually started in February 2021 and is just now coming to an end.
Right now everyone is worried about going into a correction phase "bear market" #Bitcoin
However, we have actually been in one since the first 2021 peak. #BTC
And it looks like we might be coming out of it #soon. pic.twitter.com/2e87uZLw61
— Plan©️ (@TheRealPlanC) January 24, 2022The overall cryptocurrency market cap now stands at $1.667 trillion and Bitcoin’s dominance rate is 42%.
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