After peaking to $34K BTC plunged by 8% in a fast weekend price action that we will be discussing more in today’s BTC news.
In spite of the rapid sell-off, the buyers have stepped in to purchase the dip. BTC is now trading for $31,300 and it increased by 7.5% over the past 24hours and the altcoins such as Ethereum remain green in spite of the drop as well. A lot of people attribute the price volatility to the weekend so while BTC was a retail-focused market, institutions started to trade it and often led to an increase in liquidity and volumes on weekdays compared to the weekends. Some argued that BTC could be undergoing a blow-off top gaining about $4000 in the span of one day, after peaking at $34K.
One trader shared charts showing that he entered a BTC short position near the highs as a result of the overbought indicators. As the charts show below, certain indicators showed that BTC’s price action was getting overheated quite fast and needed time to reset. What gave the traders a break with the rapid recovery that BTC saw. While BTC traded as low as $30,000 a few minutes ago, it increased to almost $33,000 again so this rapid recovery in the price action shows that there’s a bid for the crypto to appear on any dip.
The buying pressure is institutional since Grayscale, for example, added about 13,000 BTC to its holdings late in December to account for the major influx of institutional capital. There’s also news that companies such as SkyBridge Capital and Massmutual are purchasing dozens of millions of dollars worth of BTC.
I just entered a small short.
Will add more if I see a nice reaction.
— Byzantine General (@ByzGeneral) January 2, 2021
As recently reported, The last time an indicator like this one flashed, it made BTC drop by almost 40% and now this indicator has returned. Bitcoin is facing quite the turbulence as of late with the crypto price action favoring the bulls. Each dip resulted in a strong buying pressure which led to an all-time high with the ongoing bulls market turning into a parabolic increase. The cryptocurrency is fast approaching $30,000 with this being the key level that could prove to be a major hurdle for the cryptocurrency to break above. One analyst spoke about Bitcoin’s outlook explaining where the trend will go in the mid-term and will mostly depend on the reaction to an emerging trend.
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