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Bitcoin Price Prediction: Drops to $39,650 Amid Unconstitutional Canadian Law & GBTC Withdrawals

In the In the realm of cryptocurrency, the latest Bitcoin price prediction becomes increasingly complex as the asset dips to $39,650, influenced by a blend of regulatory news and investment product dynamics. On Wednesday, Bitcoin registered a notable decline, trading at $39,653, marking a 1.03 percent decrease.

Contributing to this downward trajectory, a recent legal development has emerged from Canada, where a law enacted to halt cryptocurrency donations to demonstrators has been declared unconstitutional.

Simultaneously, a surge in withdrawals from the Grayscale Bitcoin Trust (GBTC) is exerting additional downward pressure on Bitcoin prices, spotlighting the sensitivity of the digital currency to both political and market forces.

Canadian Law Blocking Crypto Donations Ruled Unconstitutional

The Federal Court of Canada has deemed the Canadian government’s use of emergency powers to freeze cryptocurrency donations for truckers protesting as illegal. In February 2022, in reaction to the “Freedom Convoy” protests against COVID-19 restrictions, Prime Minister Justin Trudeau’s government employed the Emergencies Act to halt financial assets, including cryptocurrencies.

Canada’s use of law freezing protesters’ crypto donations was unconstitutional: Court

— Trade Alerts, Trade Ideas and Crypto (@AlertTrade) January 24, 2024

The court ruled this measure as unreasonable and without lawful justification, asserting that the situation did not constitute a national emergency. The Canadian Civil Liberties Association heralds the judgment as a landmark decision, emphasizing that the Emergencies Act should only be invoked as a measure of last resort.

Although Finance Minister Chrystia Freeland has announced plans to appeal, this ruling underscores the importance of judicial oversight over governmental measures related to cryptocurrencies.

Amidst this backdrop of legal challenges and evolving government stance on cryptocurrency donations, Bitcoin’s role in funding the protests could lead to increased scrutiny and potential price fluctuations.

GBTC Withdrawals Intensify Downward Pressure on Bitcoin

Bitcoin has dipped below the $39,000 threshold, marking a two-month nadir largely attributed to significant investor pullbacks from Grayscale’s Bitcoin Trust (GBTC). Since its transition to a spot Bitcoin exchange-traded fund (ETF) on January 11, GBTC has seen an exodus of funds exceeding $3.4 billion.

The persistence of this withdrawal trend raises market apprehension. Eric Balchunas, an ETF analyst at Bloomberg, reported a staggering $515 million withdrawal on January 23, leading to a 13% reduction in GBTC shares in circulation.


GBTC Outflows keep Coming.

GBTC lost another 15K #BTC yesterday.

Total ETF flows were
GBTC outflows offset
+6K #BTC for Blackrock &
+ 4K #BTC to Fidelity

Follow live updates on our ETF Tracker.

— Thomas | (@thomas_fahrer) January 23, 2024

Despite some indications of the outflow abating, there remains a looming concern over potential further losses. The bulk of these recent outflows is ascribed to the beleaguered exchange FTX, which offloaded a significant quantity of its GBTC holdings.

Bitcoin Price Prediction

On January 24, Bitcoin (BTC) edged up modestly, marking a 0.33% increase to trade at $39,720. The digital currency, amid a volatile market environment, is approaching its pivot point at $39,947, delineated by the green line on the 4-hour chart.

BTC/USD is facing immediate resistance at $40,884, with subsequent barriers at $41,791 and a more formidable one at $43,394, which could cap upward movements. On the downside, support is initially found at $38,618. Should bearish momentum intensify, further supports at $37,638 and $36,745 may come into play.

Bitcoin Price Chart – Source: Tradingview

The Relative Strength Index (RSI) is currently at 44, indicating neither overbought nor oversold conditions, suggesting a potential for movement in either direction. The 50-Day Exponential Moving Average (EMA) is at $40,494, slightly above the pivot point, hinting at a tussle between bullish and bearish sentiments.

Chart analysis reveals a double top pattern with resistance looming around $39,950. Should Bitcoin fail to break through this level, a selling trend could be triggered. The overall trend for Bitcoin remains bearish as long as it stays below the $40,000 threshold.

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The post Bitcoin Price Prediction: Drops to $39,650 Amid Unconstitutional Canadian Law & GBTC Withdrawals appeared first on Cryptonews.

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