Bitcoin chases new high as analysts say “smart money never stopped” buying

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Total cryptocurrency market cap is back above the $ 1 trillion level when Bitcoin (BTC) bulls pushed the price back to $ 40,000 on Jan. 14.

Daily market performance in cryptocurrencies. Source: Coin360

Bitcoin price rose to $ 40,099 in the early hours of trading on Jan. 14, before falling back to $ 39,500, according to data from Cointelegraph Markets and TradingView. This is a quick turnaround after the recent drop below $ 31,000, and shows that despite the massive $ 1.5 billion liquidation this week, specialty and retailers want BTC price spikes.

The establishment of $ 40,000 as support is an important psychological level and support that traders watch. If traders are able to flip the level to be supported, expanding to $ 45,000 is the mindset that many traders follow.

BTC / USDT 4-hour chart. Source: TradingView

While the previous $ 40,000 rally was driven in part by a spate of retail purchases, Guy Hirsch, executive director of the U.S. wing of eToro, sees institutions as the driving force behind the current rally. According to Hirsch, “it would be no surprise to see a new all-time high during or even before this coming weekend”.

In private comments on Cointelegraph, Hirsch said:

“Smart money never stopped allocating Bitcoin, even though the late-stage retailers who helped push the last rally over $ 40,000 were largely shaken. Now the momentum is clearly optimistic again and the price movements reflect this sentiment. “

Institutions continue to buy bitcoin

While Bitcoin’s recent price volatility has given some of the newer institutional investors pause, the more seasoned financial powers have bought the slump from weak hands and taken full advantage of the sharp downturn.

Notably, it’s not just BTC that is receiving institutional attention over the course of the current market cycle. Denis Vinokourov, Head of Research at Bequant, sees the growing trend as a positive development for the entire cryptocurrency ecosystem.

Vinokourov said:

“The open interest in Bitcoin futures may have increased inexorably, but this has not prevented capital from flowing into altcoins and relevant derivatives as well. This in turn suggests a breakdown, targeted asset allocation and further maturation of the broader market. “

From here it’s 50/50

As Cointelegraph reports, since BTC fell on Jan. 11, some of the more prominent figures in space have been more bullish than ever and are also calling for Bitcoin to hit a new all-time high in the near future.

Decentrader’s founder, filbfilb, said, “The immediate future for the top cryptocurrency is” 50/50, which is what happens at this point. “A move above $ 40,000 will create a new level of support that is” very likely to retest the all-time high. “

In a private conversation with Cointelegraph, the analyst stated:

“The price movement is very similar to both the rejection and correction of $ 35,000 and that of $ 20,000. We shot through at $ 35,000; At $ 20,000, we had to retest the lows. ”

Regardless of what happens, the analyst sees $ 40,000 as “the crucial linchpin for the next few weeks.”

BTC / USD daily chart. Source: Coin360

Altcoins are also seeing positive price movements for the third time in a row. Ether (ETH) rose 9% to $ 1,245 and Polkadot (DOT) found additional momentum as it rose 33% to a new high of $ 14.92.

The total market cap for cryptocurrencies is now $ 1.04 trillion, and the dominance rate of Bitcoin is 69.1%.