Crypto news: Weaker sentiments on Bitcoin. False breakout above $38,000?

At the beginning of the week, the sentiments of the cryptocurrency market are mostly weak, with most of them recording moderate declines. Bitcoin's price has seen a several-percent correction since on Friday, bulls managed to take BTC to levels near $38,500. Also, Ethereum declined from $2150 level, near yearly highs. 

• The declines have come at a time when short-term investors (those holding their BTC for less than 155 days) are posting gains of nearly 15 percent on average, which according to Glassnode analysis has historically heralded stronger short-term selling pressure and preceded corrections. Additionally, recent on-chain data suggests slightly higher selling activity by long-term investors.
• J.P. Morgan, in a commentary on the current market situation, pointed out that the penalty Binance will pay to the US Department of Justice seems positive for both the exchange itself and the crypto market as a whole. The conclusions of the investigation of the largest cryptocurrency exchange did not indicate problems with liquidity and user funds, which for the market seems to mean that the 'second FTX' scenario has become less likely;
• Matrixport expects the Bitcoin price to rise to $45,000 in the event of another breakout above $38,000 on high volume. Seasonally, December was very successful for Bitcoin, returning an average of 12% to investors, which would now suggest prices near $41,000 by the end of next month.

A false breakout above $38,000?

The average purchase price of BTC by all investors is currently around $31,000. According to Glassnode, such a level is also emerging as a potential range for deeper corrections that seek to test important 'boundary levels' of the market, where increased investor activity, in this case buying, can be observed. For this downward scenario to currently come true, Friday's breakout of Bitcoin would likely have to be a 'false breakout' from an ascending triangle formation.

BITCOIN nearly horizontal line of resistance near $37,700 - $38,500 with an upward sloping support level (increasingly lower lows) indicates an ascending triangle formation from which price breakouts usually occur upward. On the other hand, the rapid push of BTC after the rally above $38,000 (a level whose overcoming, according to many analysts, indicated increases toward $40,000) may indicate a 'false breakout' and suggest a slow reversal of forces in favor of sellers. Source: xStation5

Trader activity between $35,300 and $36,000 may prove important for BITCOIN momentum. A drop below the 23.6 Fibonacci retracement could indicate a distribution, with a possible test of the area around $31,000. Trading data suggests a gap - a few transactions have been made between $31,000 and $33,000, and in case of a sell-off, BTC price can test those levels. Source: xStation5

Bitcoin's average gains in December. Will seasonality 'play' in favor of buyers again? Source: Matrixport Technologies

ETHEREUM (D1 interval)
Looking at ETHEREUM, we see a potentially declining double peak pattern, at $2200. On Friday, for the third time this year, the price reacted with a dynamic slide from levels that were also negated in the first half of the year. The key support level to watch remains $1850. At the same time, the long-term trend line has been respected, since the summer of 2022. A quick return above $2100 could suggest stronger buying activity and elevator ETH to new local highs. Source: xStation5