what is Bitcoin price today

Why is Bitcoin price up today?

Bitcoin price is up today as institutional investor inflows and increased trading volumes restore BTC’s bullish momentum.

Bitcoin (BTC) price is up today, topping $42,866 after dipping as low as $40,300 over the weekend. The rally highlights traders’ continued bullish bias for Bitcoin, which produced the best November performance since 2020 and remains on a bullish trajectory in December.

The bounce back above $42,000 comes amid $4 billion BTC being sold in two days, setting an 18-month high. The recovery may show the markets’ belief that a spot BTC exchange-traded fund (ETF) will be approved in January 2024, and the expectation of approval is matched with significant cash inflows from institutional investors.

Now that BTC has notched its best monthly close in 19 months, let’s look into the reasons why Bitcoin price is up today.

Why is Bitcoin price down today?

Bitcoin price is down today due to excessively overbought conditions and miners offloading some BTC.

Bitcoin (BTC) price encountered a sell-off on Dec. 11, dropping nearly 7.5% to around $40,640. Multiple factors contributed to the price decline.

Bitcoin’s price decline on Dec. 11 shows a leverage wipeout has occurred amid overbought conditions.

Notably, the cryptocurrency’s daily relative strength index (RSI) has been above 70 since Dec. 5, indicating that it is overvalued. An overbought RSI typically leads to the formation of local market tops as buyers diminish and sellers pile in.

Bitcoin low volume sparks BTC price warning as metric hits ‘value zone’

Bitcoin NVT signal data presents conflicting views of what might happen to the current BTC price range.

Bitcoin (BTC) price action may be “unsustainably high,” as one metric hits its highest levels in seven months.

Data from on-chain analytics firm Glassnode confirms that on Dec. 21, Bitcoin’s network value to transaction (NVT) signal reached levels not seen since April.

Bitcoin activity may not support $17,000 BTC price

Created by statistician Willy Woo, NVT essentially measures the ratio between on-chain activity and the price of Bitcoin.

NVT signal modifies its readings by using a 90-day moving average of daily transaction volume instead of raw data, something Glassnode says “improves” NVT and allows it “to better function as a leading indicator.”

On Dec. 21, the NVT signal hit 18.58, a level that last appeared as Bitcoin declined in the final days of April. At the time, BTC/USD traded at just over $40,000.

Fast forward to year-end, and NVT is flashing a warning. Despite Bitcoin being worth less than 50% of its April levels, network volume has declined to such an extent that even the current $16,800 valuation might not last.

As Woo explained in a description of NVT ratio on his analytics site:

“When Bitcoin’s NVT is high, it indicates that its network valuation is outstripping the value being transmitted on its payment network, this can happen when the network is in high growth and investors are valuing it as a high return investment, or alternatively when the price is in an unsustainable bubble.”

*Bitcoin NVT signal annotated chart. Source: Glassnode/Twitter*

A tale of two NVT signals

There is a catch to NVT, however. As noted by various analysts, including Woo, the constantly changing nature of the Bitcoin network means that transactions are increasingly moving off-chain.

Together with other phenomena, this impacts on-chain transaction data to the extent that NVT may produce an overly bearish picture of value-to-transactions.

This is addressed with an addition to the indicator called dynamic range NVT (DRNVT). Created by Charles Edwards, CEO of asset manager Capriole, DRNVT uses standard deviations to measure NVT divergence from the mean. It also supplies value zones for easier determination of entry points based on its readings.

Currently, DRNVT is in that value zone, data from TradingView shows — a key contrast to the standard model.

“The NVT Signal with a dynamic fair value range must be used with care,” Edwards nonetheless cautioned in an introduction to the indicator in 2019:

“As with all markets, an asset can remain ‘expensive’ or ‘cheap’ for extended periods or time and continue to get even more expensive or cheaper.”

*BTC/USD 1-day candle chart (Bitstamp) with dynamic range NVT signal. Source: TradingView*

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Bitcoin price fails to retake $17K with market ‘not prepared’ for dip

Bitcoin remains stable, but that will not last long, BTC price analysis agrees.

Bitcoin (BTC) divided traders yet again on Dec. 21 as sideways BTC price action split opinion on the future.

*BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView*

$17,500 becomes popular BTC price target

Data from Cointelegraph Markets Pro and TradingView followed BTC/USD as it acted within a tight range just below $17,000.

A single brief spike above the $17,000 mark failed to last, the pair returning to familiar territory from the past week.

For popular traders, there was a lack of consensus, with some calling for an eventual breakout to the upside and others demanding a rapid fall toward $10,000.

“I’d want it to hold $16.7K in order to see continuation on Bitcoin,” Michaël van de Poppe, founder and CEO of trading firm Eight, told Twitter followers on Dec. 20:

“For now, it’s fine. Some sideways consolidation, before breaking $17K for further continuation to $17.5-17.7K.”

Fellow trader and analyst Elizy agreed on the potential for a rethink once $17,500 hit, while Crypto Tony also eyed that zone as a line in the sand.

“Holding that EQ would still present a good opportunity for us to pump to the supply zoned around $17,300 – $17,600. My stop loss on my short is if we close above $17,600,” he commented alongside a chart on the day.

*BTC/USD annotated chart. Source: Crypto Tony/ Twitter*

Trading resource Game of Trades, meanwhile, eyed the potential for the S&P 500 to punish bears next.

“Short squeeze setup in the works for the market,” it predicted alongside a put/ call ratio chart for the index:

“A big move up and it’s game over for all these puts.”

*S&P 500 aggregated put/ call ratio annotated chart. Source: Game of Trades/ Twitter*

Far from bullish, on the other hand, Il Capo of Crypto warned that a downside move would take market participants by surprise.

“Most people are not prepared for what is coming and it shows,” he tweeted, echoing a tone in place for much of the year.

Il Capo of Crypto additionally noted that “some altcoins leading the drop already, breaking key supports and most of them making new lows.”

“So calm being out of the market,” he added:

U.S. dollar stable after Japan shake-up

After surprise events involving the Bank of Japan (BoJ) the day prior, the U.S. dollar began to consolidate after seeing a fresh drop.

The U.S. Dollar Index (DXY), ostensibly still inversely correlated to crypto markets, focused on the 104 mark at the time of writing.

*U.S. dollar index (DXY) 1-hour candle chart. Source: TradingView*

“DXY lower due to other currencies becoming relatively stronger on hawkish policy —> stocks + crypto down/sideways,” commentator Tedtalksmacro summarized in part of a Twitter reaction to the BoJ.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.