• Bitcoin price reached a crucial psychological resistance level of around $44.5k after rallying from trading at about $17k in January fueled by heightened institutional demand amid the global banking crisis.
• The recent Bitcoin price retrace could pave the way for the highly anticipated altcoin season, thus pushing the flagship coin below $40k in the coming weeks amid heightened social mentions of the buy-the-dip narrative.

Bitcoin’s (BTC) price opened the second week of December in a correction mode, which has resulted in more than $103 million liquidated in the derivative leverage trading during the 24 hours leading to Monday. The sudden Bitcoin price sell-off has also impacted the majority of the altcoin market which has dropped between 5-10 percent with the exception of a few coins like Avalanche (AVAX), Binance Coin (BNB), and Immutable (IMX).

The ongoing Bitcoin correction has, however, increased the social mentions of the ‘buy the dip’ narrative in anticipation of further upside in the coming.

Moreover, the heightened institutional demand has triggered a notable imbalance against the supply, despite the Bitcoin miners being spotted on a selling spree in the past few days. According to our market data, Bitcoin price has dropped approximately 4 percent in the past 24 hours to trade around $42k on Monday during the early New York session.

Altseason Threatens Bitcoin Price Pump

The recent Ethereum (ETH) breakout from a macro ascending triangle has significantly increased the altcoin’s bullish calls. Moreover, Bitcoin dominance has been experiencing diminished returns and could fall back towards the support level of around 40 percent and pave the way for the altseason.

As a result, popular crypto trader Josh Olsezewicz has issued a bold prediction that Bitcoin price could drop below the $38k mark and retest the $35.7k psychological support. The gloomy short-term outlook for the flagship cryptocurrency is coinciding with the anticipated approval of spot Bitcoin exchange-traded funds (ETFs) in the United States, which could trigger the ‘sell the news’ narrative after a year of hyped approval.

Notably, market experts believe the United States Securities and Exchange Commission (SEC) could approve all the spot Bitcoin ETFs by January 10, amid an improved crypto regulatory landscape.

Furthermore, the 2024 US presidential elections are fast approaching, whereby Bitcoin and the crypto subject are expected to play a crucial role in the next POTUS. Meanwhile, the altcoin market cap TOTAL2, which excludes Ethereum and Bitcoin, is retesting crucial support levels in anticipation of a major breakout rally.

Furthermore, market data provided by CoinShares shows that institutional cash inflows have increased in altcoins despite Bitcoin’s dominance.

BTC Price Action

While Bitcoin price closed last week on a strong bullish candle, which signals a possible imminent weekly golden cross between the 50 and 200 Moving Averages (MA), the daily time chart shows short-term weaknesses.

Furthermore, the mother coin validated a double top following Monday’s drop coupled with a bearish daily Relative Strength Index (RSI). The Bitcoin bulls must hold on to the support range of around $38.5k to avoid a capitulation below $35k in the coming weeks as altcoins take over the bullish show.

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