In the short term, the critical technical resistance level is $ 35,500. Over the past 24 hours, Bitcoin has been trending consistently at this level. When Bitcoin rallied to around $ 35,500 on January 13th on Binance, it fell 8% shortly thereafter, indicating strong selling pressure.

A pseudonym trader known as “Byzantine General” explained that there are multiple sell orders on Coinbase ranging from $ 36,500 to $ 37,000, and said, “I still don’t bid,” and added that he was “buying traps at random. There is a lot of uncertainty in the market with large price swings from $ 31,000 to $ 35,000 with no breakouts or bearish reversals. The trader also notes that Bitcoin is currently facing off against VWAP with high selling pressure at key resistance levels.

Bitcoin (BTC) is in the $ 32,000- $ 35,000 range after falling sharply on January 12. Traders are still confused about the short-term BTC route due to various mixed signals. Some are optimistic about the fast recovery from $ 30,500, and Grayscale is reopening its products to new investors. Others are warned of the persistent deflection in the $ 35,000 to $ 36,000 resistance range.

However, over the past 24 hours, public opinion about Bitcoin has become increasingly positive. The quick correction from $ 41,000 to $ 30,500 led to an influx of valuable and long-term buyers. Before the correction, the funding ratio of bitcoin futures hovered above 0.1% most of the time, which means that the market was extremely long-term and highly leveraged.

The forward financing rate is a mechanism that balances the market by rewarding buyers when the market is selling the majority and sellers when the market is long. In the bitcoin futures market, the average funding ratio is 0.01%. This means that holders of long-term contracts must pay 0.01% of the value of the positions every eight hours to the counterparty who sells. When the market was heavily indebted for a long time, when the first major drop occurred, the bitcoin price began to fall with successive liquidations.

After the downturn, the futures market became significantly less hot, and most derivatives returned to normal after rising interest. While open interest in the bitcoin futures market is still close to its highs, the market is healthier than before. This increases the likelihood of resuming the meeting in the foreseeable future.

Positive macro accounts surround Bitcoin
According to Ki Yong Joo, CEO of trading data platform CryptoQuant, several institutional investors bought Bitcoin for roughly $ 30,000. Thus, if the bitcoin price falls to the support range of $ 30,000 to $ 32,000, organizations are more likely to protect this level of large buy orders. This is the main reason Bitcoin reacted to massive consumer reactions on Coinbase and other major US exchanges when it dropped to $ 30,500 on January 12. “I guess if these people are behind this bullish race they will protect the 30K Level. Even if we have a fall, it will not go below 28K. ”

Aside from the potential for whales to accumulate longer periods of $ 30,000, there are two main plots that can heighten feelings about Bitcoin. First, several regular media coverage reported that US President-elect Joe Biden was expected to appoint Gary Gensler as head of the Securities and Exchange Commission. Gensler previously taught Blockchain and Money, which has since been released for free on MIT OpenCourseWare. With this in mind, Mechanism Capital partner Andrew Kang said, “The likelihood of #BTC ETF approval has skyrocketed.”

If a Bitcoin ETF is approved after years of failure, it will lead to two things. First, it will further legitimize Bitcoin as a class of fixed assets and asset storage. Second, it will allow accredited investors and institutions to invest securely in Bitcoin. Currently, the Grayscale Bitcoin Trust and Bitwise 10 Crypto Index Fund are among the institutional instruments for investing in cryptocurrencies, including Bitcoin.

Shades of gray have reported significant increases in demand in recent months. On January 12, Grayscale opened its products to new investors, including investing in GBTC after it closed in December 2020. If institutions are the main driver of Bitcoin’s recent rally, new inflows to the GBTC could lead to a new bullish trend in the short term. Coincidentally, it was during the fund’s close period that BTC experienced a relatively large correction.

Source: CoinTelegraph

LEAVE A REPLY