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Bitcoin relief rally thwarted at $34,000

29 Jan

Bitcoin relief rally thwarted at $34,000

Altcoin surging, Bitcoin relief rally thwarted at $34,000

Several altcoins made double-digit daily gains as Bitcoin’s relief rally hit a wall at $34,000

Bitcoin’s (BTC) contraction below $30,000 was short-lived: the cryptocurrency quickly found support thanks to a new wave of buyers, including MicroStrategy with its $10 million acquisition.

Data from Cointelegraph Markets and TradingView show that this influx of funds has allowed BTC to reach a daily high of $33,866. While waiting for the Biden administration to approve a multi trillion dollar stimulus package, conversations about Bitcoin by The News Spy as a store of value are back and more heated than ever.

Although Bitcoin’s recent volatility has prompted some analysts to argue that the cryptocurrency is a cyclical asset rather than a hedge, the downturn has attracted the attentions of retail investors, who have taken advantage of the price drop to buy.

Even the Bank for International Settlements has admitted that digital currencies could have uses: the institution plans to conduct a series of tests on Central Bank Digital Currencies during 2021.

Now that the Crypto Fear and Greed Index has changed from „Extreme Greed“ to „Fear“, it seems that some investors are following Warren Buffet’s advice to „buy when there is blood in the streets“.

Institutional investors fear future regulation

According to Chad Steinglass, Head of Trading at CrossTower, Bitcoin’s correction may have been triggered by critical comments made by Janet Yellen, who is likely to become the new US Treasury Secretary.

Prior to Yellen’s comments, Bitcoin was experiencing a period of „post-correction consolidation“ between $34,000 and $38,000, while traders were „waiting to see which side of the range would be challenged or breached.“

Steinglass further explained that Bitcoin’s next movements will be determined by the actions of institutional investors:

„$31,000 has proven to be solid support, or at least not everyone has sold. We will have to wait and see if that wall holds, if institutions continue to accumulate. If they do, the uptrend is likely to reestablish itself and continue.

However, if they move to the sidelines pending further regulatory clarity, the lack of large buying flows will be felt.“

The big upswing in altcoins

Many of the major alternative cryptocurrencies have rebounded strongly: Polkadot (DOT) is in the green by 10%, reaching a peak of $18; Chainlink (LINK) is up 10% and conquered $23; Tezos (XTZ) is also performing well, with its price reaching $3.22 thanks to a daily increase of 16%.

Vonadmin