Crypto news: Bitcoin hovers $41,000. Will crypto correction deepens?

The beginning of the week for cryptocurrencies is definitely not a good one. Bitcoin is losing almost 2% and is defending itself around $41,000, but some altcoins are losing up to 10% today. One of the weakest performers is Filecoin, which has already retreated more than 20% from its peak. With no catalysts visible on the horizon in December and the still very high nominal unrealized gains of a group of short-term BTC holders, we are seeing profit realization, which is confirmed by on-chain data (Glassnode). Will Bitcoin's third-biggest one-day correction, in 2023, find a continuation with another 10% drop?

• Despite rising oil prices and incoming troubling news about a 'pro-inflation' halt to container traffic across the Red Sea, global market sentiment is still relatively good, and the US dollar is losing. This, for the moment, seems to be holding the market back from a broader BTC sell-off, but if sentiment on Wall Street were to reverse, we can expect the BTC sell-off to take a turn for the worse.
• According to Glassnode's analysis, several models tracking the dynamics of the Bitcoin blockchain indicate that the fair value of the cryptocurrency is currently oscillating between $30,000 and $36,000, looking at the 'average prices' of BTC accumulated by investors and the broader development of the network. This leads us to conclude that even a test of $37,000 would not be a level that would define Bitcoin as an opportunity, and would still suggest some premium in valuation in anticipation of halving and SEC decisions on ETFs, which we will learn in Q1 2024.

Bitcoin and Filecoin chart (D1 / H1)

Looking at Bitcoin's trading, although the MACD confirms near oversold levels (weak sentiment), the dynamics of the averages potentially suggests the possible realization of another impulse in a 1:1 correction. Such an impulse now implies a move toward $37,500, where we also observe the 38.2 Fibonacci retracement of the upward wave from the fall of 2022. The $37,000 level also appears very strong given previous price reactions in 2023 indicating that in this zone buyers may be much more active. Source: xStation5

Bitcoin maintains an uptrend, but on the D1 interval we see a peak formation, which may suggest overbought and longer-term market weakness. The trend boundary appears to be the SMA200 (red line), which is currently at the levels of the average purchase price of short-term holders (who own BTC, which than 180 days). Historically, this on-chain level has been an important support level for BTC during periods of extreme corrections. Source: xStation5

Filecoin managed to defend the level of 38.2 Fibonacci retracement of the upward wave from August, and the dynamics of the SMA200 and SMA100 averages suggest a longer-term reversal to an upward trend (golden cross). Source: xStation5