During past bull markets, Bitcoin retraced to as much as 37% on pullbacks, but the current decline has only tapped 31% max, trading at $31,986 at 5:57 PM GMT on Tuesday.
In the past week, Bitcoin had experienced a pull back of almost $10,000 from the
Many institutions have bought Bitcoin above $20,000 and many more at $30,000. Due to this, a price retracement of 40% is nearly impossible. With Grayscale leading institutional buyers, any small drops left are being bought up by institutions quickly and as effectively as possible.
In the last 26 days alone, Grayscale has acquired a whopping sum of 40,000 BTC. Despite, there is no end in sight to this buying. Microstrategy, a business analytics and mobility platform that helps enterprises is also on the buying trend. With so much buying and bullishness, it doesn’t seem like Bitcoin will be experiencing a 40% drop anytime soon.
Entrepreneur Alistair Milne summarized on Twitter on Tuesday:
$1.31 billion flowed into Bitcoin and crypto investment products last week (a new record) as investors rushed to buy the dip
$1.31billion flowed into #Bitcoin and crypto investment products last week (a new record) as investors rushed to buy the dip
97% of funds went into #Bitcoin pic.twitter.com/cmJjGqUlfG
— Alistair Milne (@alistairmilne) January 26, 2021
As noted by SPOR, it is not only institutional buyers that are in on the profit. Bitcoin Miners are also enjoying incredible returns. The “Bitcoin Miners’ Position Index has reached an
Considering current Bitcoin price action, it seems that miners are taking in anywhere between $20,000 to $30,000 per coin. At such a high mark up, the temptation to sell is almost impossible to reject. This is despite the increase in demand for the flagship cryptocurrency among
Consider this fractal
In the above fractal chart, we see similarities between the 2019 and the current 2021 cycle. As the price hit a local top, it consolidated into a bearish descending triangle pattern. All these amounting to a 30% drop. Another thing to note is that both patterns were preceded by a parabolic explosion in price.
In the current cycle, a breakout will mean that BTC can hit a previous ATH at $20,000. This would lead to a retest of crucial levels and begin a new cycle.
Notwithstanding, the past price action history of Bitcoin has shown that crashes always feature in the price action. Historically, there have been crashes between 10% to 20% drop to those that go up to the tune of 40% to 70%.
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