Sunday, February 7, 2021

After $40,000, Bitcoin Seems to Be Moving Toward Uncharted Territory

The bullish momentum in the past few days reached its peak uptrend of $40,000 at the start of the weekend. This is unlike Bitcoin, where trade is normally slow and volume drops during the weekends. Price was at $38, 512 at 14 GMT on Sunday. Gaining 1.5 % in the last 24 hours.

With this bullish trend, the sentiment among investors and retail traders on spot and derivative exchanges is that the coin is bullish. However, the trading volume of Bitcoin currently is nowhere near the mid-January or end of January volume of over $3 billion.

trading view show charts

In the past two weeks, the volatility of Bitcoin has dropped to 17%. A drop in volatility at this point could lead to a price correction. This one could be severe.

Puru Saxena, an investor and a retired money manager, said that if Bitcoin goes back above $40,000 again, it would invalidate the bearish scenario. He said:

Bitcoin back above $40,000 and although it still hasn’t taken out its ATH, unlike the previous cycle, it hasn’t completely broken down either. If $BTC closes above its January high, that’ll mean my assessment of the price action was WRONG and the bulls were right

Institutions are pushing the price

The chief investment officer (CIO) of investment firm Guggenheim, Scott Minerd, noted that the market is not strong enough to support the recent rally. The rally that occurred in January 2021 pushing Bitcoin to $42,000 and quickly dropped back to $30,000 was due to a retracement. A retracement that was caused because institutional participation is not yet string enough to support a rapid rally.

Notwithstanding, he believes that Bitcoin has come to stay. Hence, institutions, in the nearest future, will be forced to invest heavily in the pioneer cryptocurrency. This will help strengthen the market.

He said:

Cryptocurrency has come into the realm of respectability and will continue to become more and more important in the global economy.

It’s interesting to note that the second bull run is occurring at the same time Microstrategy is holding a conference discussing Bitcoin adoption to over 1,400 companies. This may lead to a massive influx of investors in the coming weeks.

After the earlier retracement to $30,000, JP Morgan analysts mentioned that Grayscale, the world’s largest digital asset management platform, will be pivotal in turning the price around.

Action continues

The $35,000 range remains the most significant price level for Bitcoin. Now that Bitcoin has broken the $40,000 hurdle for the second time, there may be a correction post a short-term top.

If you have any questions and comments on Bitcoin today, use the form below to reply.

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