Bitcoin’s rally is facing major headwinds near the $38,000 mark. Repeated failure to clear an overhead hurdle results in the start of a corrective phase. During this, buyers try to regroup at lower levels and again launch an attack at the resistance level.

On the other hand, the bears try to pull the price below critical support levels and start a deeper pullback. The battle between the two is likely to increase volatility in the next few days. Investors are ignoring the nearterm uncertainty and are focusing on the two big events in 2024, Bitcoin halving in April and the Securities and Exchange Commission’s decision on spot Bitcoin exchange-traded funds in January.

Crypto exchange-traded products witnessed a record inflow of $346 million in the week ending November 24, according to CoinShares data. Bitcoin ETPs attracted the lion’s share of investments at $312 million, taking the year-to-date inflows to about $1.5 billion.

Bitcoin rose above $38,000 on November 24 but the bears sold at higher levels as seen from the long wick on the day’s candlestick. The price action of the past few days has formed a rising wedge pattern, which is considered negative if the price breaks to the downside. The first significant support on the downside is at $34,750.

If the price rebounds off this level, then the BTC/USD pair may consolidate inside the range between $34,750 and $38,000 for some time. On the contrary, if the price slides below $34,750, it will suggest that the traders are rushing to the exit. That may start a deeper correction to the 50-day simple moving average (SMA) and then to $32,400. Buyers are expected to vigorously defend the zone between $32,400 and $31,050.

On the upside, the $38,000 remains the key level to watch out for. If the price turns up from the current level and breaks above the overhead resistance, it will signal the resumption of the uptrend. The pair may first rise to $40,000 and thereafter sprint toward the next major hurdle at $48,000.

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