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Bitcoin Price Rolls Back After Breaking Above $41,000

January 8, 2021 at 21:05 by Mark Stevenson

Bitcoin (BTC) continues to hit all-time highs, but market volatility is rising along with prices. On January 8, the price of one bitcoin broke the $41,000 mark and continued the uptrend all the way up to $41,934 at around 15:04 GMT on Bitstamp.

Anthony Trenchev, co-founder and managing partner of the Nexo cryptocurrency platform said:

Bitcoin continues to outpace all forecasts. All other assets are following him, history repeats itself from year to year over the past ten years.

However, at the time of writing, Bitcoin is now trading $39,565.

Notably, on January 7, Bitcoin bulls conquered the $38,000, $39,000, and $40,000 levels as Blomberg analysts predicted. However, profit-taking began after the flagship cryptocurrency rose above the psychologically significant level of $40k, and in a matter of minutes, BTC was down to $36,000.

Among the main suspects are speculators, algorithmic bots, quantum funds, BTC whales, as well as institutional investors.

According to CoinMarketCap, the total cryptocurrency market capitalization has exceeded $1 trillion, and the average daily trading volume has reached $181 billion. The Bitcoin Dominance Index is above 70%.

Correction is not far off

Meanwhile, the number of new Bitcoin addresses approached all-time highs reached at the end of 2017, while the number of active addresses reached a record high of 1.29 million. The previous record was reached in December 2017 at 1.19 million.

Number of active bitcoin addresses, source Intotheblock

According to experts of the analytical company Flipside Crypto, this may signal an upcoming correction. 95% of all bitcoins are stored on 2% of addresses, so if the whales are gearing up to sell, then a couple of large trades will be enough to trigger a massive correction.

The injection of liquidity into the global financial system provokes a rise in inflationary expectations and draws attention to Bitcoin as a hedging tool against inflation. Cryptocurrency proponents compare it to gold, but critics continue to insist that Bitcoin is a bubble that will burst sooner or later.

According to Jeffrey Morphy, head of Canadian mining company Bitfarms Ltd, when people start to notice that their liquid assets, in particular cash, are depreciating, they will start looking for alternatives.

If you have any questions and comments on Bitcoin today, use the form below to reply.

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