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Bitcoin performs classic bounce at $40.7K as BTC price comes full circle from January 2021

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On January 9, Bitcoin (BTC) bounced off a crucial level, strongly resembling occurrences in September 2021.

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

“Shorters will get rekt” at $40,700

BTC/USD reversed direction at $40,700 before passing $42,000, according to data.

While some found the behaviour uninteresting, it was eerily similar to Bitcoin’s price activity at the end of September, when $40,700 served as a springboard for $69,000 all-time highs seven weeks later.

“Since September, months have gone. Yet, in terms of macroeconomics, BTC is in the same boat “Rekt Capital, a trader and analyst, made a statement.

“The macro Re-Accumulation range is still solidifying. In fact, $BTC is nearly at the same level as BTC’s September retracement low.”

Meanwhile, macro commentary on the US Federal Reserve’s tightening of monetary policy has continued.

Concerns were raised this week about crypto markets’ potential to thrive in an environment devoid of the “cheap money” availability that has characterised the economy since March 2020.

In a recent Twitter tweet, markets expert Holger Zschaepitz stated, “Crypto diehards ready to find out if it really was bubble: Rock-bottom rates & trillions of dollars in CenBank money & govt stimmy helped turbocharge prices of digital assets”.

BTC/USD vs. central bank balance sheet chart. Source: Holger Zschaepitz/ Twitter

How much of a difference does a year make?

BTC/USD also matched its position from a year ago on the same day, Saturday. However, emotion was a significant difference.

The Crypto Fear & Greed Index stood at 93/100 on January 8, 2021, signalling that a local high was approaching and that the market had entered “extreme greed.”

This Saturday, on the other hand, scored only 10/100, one of the lowest values in the Index’s history, placing it deep under “severe terror” territory.

Crypto Fear & Greed Index. Source: Alternative.me
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