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Bitcoin (BTC) currently seems to be under selling pressure tanking another 4% earlier today. At press time, Bitcoin is trading at $34,812 with a market cap of $644 billion. However, in the last 48-hours, BTC has approached close to $30,000 levels twice before bouncing back.
How Low Can Bitcoin Price Dip?
Just as Bitcoin prices continues to face selling pressure from the miners, investors are fearful as to what levels it might fall further. However, CryptoQuant CEO Ki-Young Ju states that institutions would prevent BTC from falling further below $30,000.
Ju adds that when Bitcoin was trading in the range of $28K-$30K, there was a heavy institutional buying on crypto exchange Coinbase when the BTC outflows to cold storage were at a three-year-high. In his latest post, the analyst writes:
“There are many institutional investors who bought $BTC at the 30-32k level. The Coinbase outflow on Jan 2nd was a three-year high. Speculative guess, but if these guys are behind this bull-run, they’ll protect the 30k level. Even if we have a dip, it wouldn’t go down below 28k”.
Just before Monday’s BTC price correction, legendary investor Raoul Pal had predicted the event based on his years of investing experience. He noted that big hedge funds and asset managers allocate funds to risk assets at the very beginning of the year. Once the word spreads out and more people join the bandwagon, the price starts reversing.
Well, this is exactly what has happened in the case of Bitcoin. Although, there’s no direct link, the BTC outflows from exchanges creating supply shortage and later the correction validates Pal’s theory. While BTC price has entered a correction, the whales continue to accumulate more.
NEW: The number of addresses holding at least 1,000 #Bitcoin has hit an all time high during this recent sell-off, while addresses holding <0.01 BTC dropped by 10,000 pic.twitter.com/aBgAEVFPXQ
— Bloqport (@Bloqport) January 13, 2021
The Grayscale Bitcoin Trust (GBTC) has not registered any fresh inflows recently probably due to the fact that the Grayscale products were closed after Christmas. Now, they have again re-opened them for new investors to participate. Hopefully, institutions will participate again and provide a boost to BTC ahead.
Analysts Further Expect Bitcoin Price to Range Before Lift-off to $50K Plus
Crypto analysts firmly believe that before we see any further significant rise in Bitcoin price it will consolidate in the $33k-$37k range as shown in chart below. While institutional buying is heavy as seen by exchange outflow volume but high selling in Asian markets can’t be ignored as well.
Other Crypto analysts also seem to voice the same logic and expect Bitcoin price consolidating over the mentioned range.
Think we range here for a bit
Not trading the chop, going to let the consolidation finish and sleep whilst that's the case
Change of tune maybe on Jan 14ish – that's the analysis speaking, just a best guess
Good night
— //Bitcoin ????ack ???? (@BTC_JackSparrow) January 13, 2021
With crypto markets in high visibility among mainstream media and many awaiting decisions pending, it will be interesting to see how Bitcoin prices react to these upcoming events.
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