Buy the dip? Bitcoin price risks losing $30K as traders ‘manage risk’


Bitcoin (BTC) hodlers got a serious test of their resolve on Jan. 11 as the largest cryptocurrency approached $30,000.

Cryptocurrency market overview on Jan 11, 2021. Source: Coin360

BTC price hits $30,250

Data from Cointelegraph Markets, Coin360 and TradingView showed BTC/USD continue its bearish streak after Wall Street opened on Monday, taking 24-hour losses to 23%.

The move extends a reset of the market which kicked in over the weekend after Bitcoin hit all-time highs of $42,000.

How To Get Free Crypto  

BTC/USD 1-day candle chart with 21-week moving average (Bitstamp). Source: TradingView

A slow comedown accelerated through Sunday, with Monday continuing the selling pressure with little respite for traders attempting to “buy the dip.”

While traders were hardly panicked by what remains standard behavior for Bitcoin, prognoses began to favor a break from the kind of parabolic action of recent days and weeks.

For Cointelegraph Markets analyst Michaël van de Poppe, a useful reference for defining a mid-term floor lay in Bitcoin’s 21-week moving average (MA). Currently at $18,000, the indicator will be rising to match previous price growth, while the price itself may continue to fall, with the two meeting in the middle of the resulting range to form a bottom.

“If you’d ask me a scenario for #Bitcoin, I think we’ll see something like this in which the 21-Week MA comes in to play as support too,” he tweeted on Monday.

Coinbase Banner  

“Altcoins to do really well from the bottom.”

Spotlight on miner profit-taking

As Cointelegraph reported, the run above $40,000 may have incentivized miners to pause for profit-taking, with data showing that sales had reached their highest since July 2019. In addition, concerns revolved around the market being overleveraged after such rapid gains.

“Long positions had gotten very large, and so prudent risk management dictated that long holders, including miners, take a little off the table,” Chad Steinglass, head of trading at exchange CrossTower told Cointelegraph in private comments.

“The fact that this action occurred over the weekend, when traditional asset players were off from work, and when potential new inflows of cash from new investors were not yet hitting institutional players accounts, lead to order flow shifting to be unbalanced, this time sellers dominating.”

Steinglass added that the status quo may naturally shift in bulls’ favor as the trading week gets underway.

“It remains to be seen whether the start of the work week in the US and the opening of traditional banking hours will bring with it enough support from inflows to balance or overcome the sell interest or not,” he concluded.

Guy Hirsch, managing director for the U.S. at trading platform eToro, agreed.

“Bitcoin is trading down largely as a result of profit taking. Since we are still so far above the all-time high set before this recent bullish run up, it remains to be seen how much further we can fall,” he told Cointelegraph.

FreeBitcoin Banner  

Though we don’t anticipate this, a fall below $20,000 could be a bad omen for the conviction institutions have behind their Bitcoin allocations, since they largely stepped in around the $20,000 price level.”

ETH/USD 1-hour candle chart (Bitstamp). Source: TradingView

In line with Van de Poppe’s comments, altcoins were wary at press time, with many of the top ten cryptocurrencies by market cap seeing 20% losses on the day. Ether (ETH), the largest altcoin, quickly lost $1,000 support to trade at $950.

Renewed strength in the U.S. dollar, meanwhile, could also keep Bitcoin in check, he added in analysis on Monday.

Go to Source
Author: William Suberg

Recommended Crypto Services, Products and Strategies:

The first thing any crypto investor needs is is a reliable and secure Crypto Wallet.  Whether you’re looking for an online wallet, hardware wallet, desktop or mobile wallet, Crypto Renegade provides you with all the Best Crypto Wallets in each category.

Best Crypto Wallets Banner

When you’re ready to buy more crypto, or exchange your coins for others, Crypto Renegade’s list of the Best Crypto Exchanges has you covered.  The Crypto Exchanges recommended here offer everything from simplicity and convenience to advanced trading platforms and profit sharing. 

Best Crypto Exchanges Banner

If you want to learn more about the methods and tools that can be used to find Great Crypto Projects, then be sure to check out Crypto Renegade’s strategy for How To Find The Best Cryptocurrency.

Crypto Strategy Banner

For those people that don’t have any money to invest right now, or just want to understand the technology a bit more, you’ll definitely want to check out Crypto Renegade’s Free Crypto Strategy and start collecting Free Coins today!

Free Crypto Banner

What do you think about cryptocurrency? Do you have any questions about it? Be sure to leave a comment below.

This site uses Akismet to reduce spam. Learn how your comment data is processed.