Bitcoin Has Been in Roller-Coaster Mode Since the Beginning of 2021
What will be the outcome in the short term?
|Sylvain Saurel||Jan 18||3|
After an almost uninterrupted Bull Run since the beginning of October 2020, Bitcoin entered a different phase at the beginning of 2021. The price of Bitcoin first fell sharply on Monday, January 4, 2021. Its price went from $34.5K to $28.7K in a few hours.
This drop followed the new All-Time High (ATH) that Bitcoin had beaten on January 3, 2021, with a price of $34.8K.
Sale pressure from Asia, however, did not withstand buying pressure from the United States. The price of Bitcoin quickly resumed its upward trend to break through the $40K mark. Once this historic barrier was passed, Bitcoin increased its ATH to $41,941 on January 8, 2021.
The weekend that followed this new ATH was synonymous with a further drop in the price of Bitcoin. A low of $31K was then hit on Monday, January 11, 2021.
The week that we have just experienced then went on like the previous one: the price of Bitcoin rebounded sharply to cross the $40K mark again on January 14, 2021. The $40K then played the role of resistance and the price of Bitcoin stabilized around the $36K - $37K zone.
This Sunday, January 17, 2021, seems to be a perfect repeat of last week's Sunday scenario with the price of Bitcoin dropping as low as $34K. A slight rebound has taken place at the time of writing since the Bitcoin price is now $35.1K. Nevertheless, it is quite possible to imagine that Monday, January 18, 2021, will be of the same nature for the price of Bitcoin as the two previous Mondays of 2021.
Since the beginning of the year 2021, we can say that Bitcoin has entered again the roller-coaster mode:
Some mainstream media, such as CNN, fell into the trap of this roller-coaster mode when they announced at the beginning of last week that Bitcoin's Bull Run was over. CNN proudly announced that Bitcoin had entered a Bear Market. What happened next obviously proved them wrong, as the Bitcoin evolution graph shows.
The moral of the story is simple: if you want serious information about Bitcoin, don't count on CNN for it.
In a Bull Run such as the one we have been experiencing since the beginning of October 2020, it makes perfect sense for people to start selling their BTC. The unrealized profit of BTC is much higher than where it was during the June 2019 top. Miners are selling Bitcoin to take profits as well.
The key zone to observe for the current Bitcoin Bull Run is the $30.5K zone. Bitcoin could still see its price drop to this support. If a significant rebound were to occur, we would still remain in this Bull Run. If this support were to be broken, the next step would be much more uncertain for Bitcoin in the days and weeks to come.
The map of unspent Bitcoins for the Whales over the last few weeks shows a large inflow to their wallets around $29.3K:
These Whales will strongly protect their BTC in this zone, which will also act as an important support for the price of Bitcoin in the short term. If Bitcoin were to break this important support zone, a retracement towards $20K would then be a very possible scenario.
In the face of so much uncertainty, the best thing to do is to remain a Bitcoin HODLer if you are already in the Bitcoin world. If not, it may be appropriate to wait for a clearer trend to emerge. It is up to you to decide what seems to be best for you according to your strategy with Bitcoin.
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