The total market cap of cryptocurrencies crossed the $ 1 trillion level once again when bitcoin bidders brought the price back to $ 40,000 on January 14th.
Bitcoin rose to $ 40,099 during the early hours of trading on Jan.14, according to data from Cointelegraph Markets and TradingView, before dipping to $ 39,500. This represents a rapid retreat from the recent drop below $ 31,000, and it shows that professionals and retailers are keen on the price of BTC to rally despite the massive liquidation of $ 1.5 billion this week.
Placing $ 40,000 in support is an important psychological level and the important support that traders look for. If traders can turn the level into support, expanding to the $ 45,000 mentality is the one that many traders have followed.
While the previous $ 40K rally was partly driven by a buying from retail investors, Jay Hirsch, chief executive of eToro in the US, sees institutions as the driving force behind the current rally. According to Hersh, “It wouldn’t be surprising to see a new full-time pace during or even before the end of this week.”
Hirsch said in personal comments to Cointelegraph:
“Smart money has never stopped exiting Bitcoin, not even when the last-tier retailers who helped the recent rally above $ 40K were largely uncomfortable. Now the momentum is clearly bullish again, and price action is reflecting that sentiment.”
Institutions continue to buy bitcoin
While recent fluctuations in bitcoin price have given some new institutional investors a respite, more experienced financial centers have bought the bearish out of weaker hands and have fully benefited from the downturn.
Interestingly, it is not just Bitcoin that is receiving institutional attention as the current market cycle evolves. Denis Vinokurov, head of research at Bequant, sees the growing trend as a positive shift in the entire cryptocurrency ecosystem.
“The open interest in bitcoin futures may grow steadily, but that hasn’t stopped capital from flowing into cryptocurrencies and related derivatives as well. This in turn means separation and target asset allocation and further development of the wider market.”
And then 50/50
As reported by Cointelegraph, after BTC plunged on January 11th, some industry leaders are more optimistic than ever, and they are also urging Bitcoin to reach a new full-time high in the near future.
Decentrader founder Philbfilb said: “The near future for a leading cryptocurrency is“ 50/50 of what’s happening now. ”A move above $ 40,000 will define a new level of support where testing is most likely an historic rally.
In a private conversation with Cointelegraph, the analyst said:
“Price action is very similar to $ 35,000 rejections and redemptions, plus $ 20,000. We broke through $ 35,000; to $ 20,000, we needed to test the lower levels.”
Whatever happens, the analyst considers the $ 40,000 a “major focal point that will define the next few weeks.”
Altcoins is also showing positive price dynamics for a third consecutive day. Ether (ETH) rose 9% to $ 1,245, while Polkadot (DOT) saw further momentum, surging 33% to a recent high of $ 14.92.
Cryptocurrency’s total market cap is now $ 1.04 trillion, and Bitcoin’s dominance rate is 69.1%.