On January 21, the cryptocurrency market experienced an increasing wave of pressure and within the last hour, the Bitcoin (BTC) price fell below the $ 30,000 mark for the first time since January 4.
Now that Bitcoin has lost support of $ 32,000 and $ 30,000, a growing number of analysts suggest that the price may test the support of $ 24,000. One theory behind the dip suggests that institutional investors viewed Bitcoin as a pressure trade and decided to make a profit.
As reported by Cointelegraph, Scott Minerd, Guggenheim’s chief investment officer, recently suggested that the price of Bitcoin ‘would probably be a peak for 2021 and could see a’ retracement back to the 20,000 level ‘.
JPMorgan strategists John Normand and Federico Manicardi also warned that investors using BTC “as a portfolio diversifier are putting themselves at risk” as Bitcoin is more of a cyclical asset than a hedge.
This warning seems to have been done well, given the current volatility. While sales may be painful for investors who are too smart, the social activities that took a closer look during the downward move suggest that the current volatility may not be a macro-trend change.
In private commentary at Cointelegraph, TheTIE analyst Erik Saberski notes that the dominant market capitalization has not really changed during previous declines in the Bitcoin price. ‘
Saberski said:
‘This implies that sales paid out completely earlier in the month, while recent BTC sales shift more to other cryptocurrencies. If we look at the daily sentiment, the same recent drops * usually * have similar sentiment. However, we do not see it anymore. ”
Stimulus hopes shares may stay near overall highs
The traditional markets are still being strengthened by the prospect of a broad stimulus package from the Biden administration.
The S&P 500 and NASDAQ both ate new highs of all times on January 21 and closed at 0.03% and 0.82% respectively. The Dow also closed the day with a gain of 0.04%.
Of the top 100 coins, CELO was the only project with significant profits, achieving $ 48.87% and trading at $ 3.37. Ether (ETH) corrected by 21.28% and Polkadot lost 8%.
The overall market capitalization for cryptocurrencies now stands at $ 871 billion and Bitcoin’s dominance rate is 64.3%.