What can invalidate the short-term bear scenario for Bitcoin? 🚨 This article is 4 years old...
What can invalidate the short-term bear scenario for Bitcoin?
2 min read
Updated: Jan. 23, 2021 at 7:03 pm UTC
The price of Bitcoin is showing strong momentum as it recovers above $33,000 following a relatively large correction on January 12.
The general market sentiment around Bitcoin remains positive. But, there is one major invalidation point for the bearish scenario for BTC.
Bitcoin must reclaim $36,000
In the foreseeable future, if BTC wants to reach an all-time high, it is critical that BTC stays above $36,000.
Traders have emphasized that they would rather buy much lower or above $36,000, analyzing the current market landscape.
Scott Melker, a cryptocurrency trader, said:
“If price drops again, this is what I will be watching for. Still on track for the moment, but would rather see it flip the EQ of that channel and continue up without the dip.”
However, if the price of Bitcoin rejects the $35,000 to $36,000 resistance range, then another major pullback could occur.
In the short term, there are two key levels for Bitcoin: $33,000 and $36,000. Surpassing $36,000 would likely lead to the retest of its record-high.
Staying above $33,000 would mean that it has solidified as a macro support area, which would likely result in another BTC rally.
There are whale cluster support areas in between $30,000 to $33,000, which makes them strong support levels.
Whale clusters form when whales accumulate Bitcoin and do not move them. This behavior signals that whales are accumulating BTC. Hence, if BTC drops to the price level they bought at, whales are more likely to re-bid and build on their positions, buying more Bitcoin.
It is similar to MicroStrategy’s new $10 million Bitcoin buy order in the past several hours. Whales with a long-term strategy in mind are likely to continue building their position with a two to three-year outlook on the market.
Michael Saylor, the CEO of MicroStrategy, said on January 22:
“MicroStrategy has purchased approximately 314 bitcoins for $10.0 million in cash in accordance with its Treasury Reserve Policy, at an average price of approximately $31,808 per bitcoin. We now hold approximately 70,784 bitcoins.”
Atop this, Grayscale keeps on purchasing a larger number of Bitcoin on a weekly basis, which remains a major catalyst for Bitcoin in the foreseeable future.
What happens next?
Some traders believe that Bitcoin and Ethereum could hit a new all-time high and then see a major correction afterward.
Nik Yaremchuk, a cryptocurrency trader and on-chain analyst, said that ETH could potentially achieve $1,600 then correct. He wrote:
“Very often, $ETH predicts market moves faster than $BTC chart displays. At the moment it looks like we get $46k and $1.6k, after that I expect a huge drop. I don’t want to make long-term predictions, it looks like this now.”
This could mean that Bitcoin could see a deeper correction at around $46,000, slightly above the current all-time high at $42,000.
Bitcoin Market Data
At the time of press 7:03 pm UTC on Jan. 23, 2021, Bitcoin is ranked #1 by market cap and the price is down 0.38% over the past 24 hours. Bitcoin has a market capitalization of $599.22 billion with a 24-hour trading volume of $50.87 billion. Learn more about Bitcoin ›
Crypto Market Summary
At the time of press 7:03 pm UTC on Jan. 23, 2021, the total crypto market is valued at at $941.37 billion with a 24-hour volume of $112.09 billion. Bitcoin dominance is currently at 63.63%. Learn more about the crypto market ›
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