Bitcoin (BTC) hodlers received a serious test of their resolve on Jan. 11 when the largest cryptocurrency neared $ 30,000.
The BTC price is $ 30,250
Data from Cointelegraph Markets, Coin360 and TradingView showed that after Wall Street opened on Monday, BTC / USD continued its bearish phase, increasing 24-hour losses to 23%.
The move extends a market reset that began over the weekend after Bitcoin hit an all-time high of $ 42,000.
A slow decline accelerated through Sunday, with Monday continuing selling pressures with little rest for traders trying to “buy the dip”.
While traders hardly panicked, which is still standard behavior for Bitcoin, forecasts favored a departure from the kind of parabolic action of the past few days and weeks.
For Cointelegraph Markets analyst Michaël van de Poppe, a useful reference for defining a medium-term minimum amount is the 21-week moving average (MA) of Bitcoin. Currently at $ 18,000, the indicator will rise to match previous price growth while the price itself could continue to fall, with the two meeting in the middle of the resulting range to form a bottom.
“If you ask me about a #Bitcoin scenario, we’ll likely see something like this where the 21-week employee also acts as support,” he tweeted on Monday.
“Altcoins do really well from below.”
Spotlight on Miners’ Profit Taking
As Cointelegraph reported, the $ 40,000 run may have caused miners to take a break to take profits. Data shows that sales were at their highest level since July 2019. In addition, there were concerns that the market would become overfunded after such quick gains.
“Long positions had grown very large and such prudent risk management dictated long holders, including miners, taking a little off the table,” Chad Steinglass, head of trading at Exchange CrossTower, told Cointelegraph in private comments.
“The fact that this action took place over the weekend when traditional asset players were absent from work and potential new inflows of money from new investors hadn’t yet hit institutional players’ accounts resulted in an unbalanced shift in the flow of orders, this time with sellers dominating. ”
Steinglass added that the status quo could of course shift in favor of the bulls as the trading week begins.
“It remains to be seen whether or not the start of the US work week and the opening of traditional banking hours will bring enough inflow support to balance or overcome sales interest,” he concluded.
Guy Hirsch, Managing Director for the USA at the trading platform eToro, agreed.
“Bitcoin is largely traded for profit-taking. With we’re still so far above the all-time highs set before this recent uptrend, it remains to be seen how far we can go,” he told Cointelegraph.
“While we don’t anticipate this, a drop below $ 20,000 could be a bad omen for the judging institutions behind their Bitcoin allocations, as they have largely hit the price level of around $ 20,000.”
In line with van de Poppe’s comments, altcoins were cautious at the time of publication as many of the top 10 cryptocurrencies by market capitalization were down 20% on that day. Ether (ETH), the largest altcoin, quickly lost $ 1,000 support for trading at $ 950. The renewed strength of the US dollar could also keep Bitcoin in check, added van de Poppe in the analysis on Monday.
In line with van de Poppe’s comments, altcoins were cautious at the time of publication as many of the top 10 cryptocurrencies by market capitalization were down 20% on that day. Ether (ETH), the largest altcoin, quickly lost $ 1,000 support for trading at $ 950.
The renewed strength of the US dollar could also keep Bitcoin in check, added van de Poppe in the analysis on Monday.