Bitcoin (BTC) price struggles against a resistance at $37k

After an impressive start of the year, the price of  Bitcoin has seemingly lost its momentum. The coin saw a strong dip in the last 11 days, since hitting its most recent all-time high on January 8th. Today, January 19th, the coin struggles to breach a resistance level at $37,000, with each attempt being followed by a rejection of its price.

Fundamental analysis: Skepticism returns as the price drops

Throughout Bitcoin’s history, the coin has been accused of being a bubble every time after a major price surge. The process would usually see the coin’s price grow, then suffer a correction, then grow some more, and then finally see its price dip during the bearish part of the cycle.

At that time, accusations of BTC being a bubble would emerge, stating that the coin is a scam and that the market is manipulated. While most people ought to know better by now, similar statements have  already emerged, only proving that those who are throwing such accusations do not understand what Bitcoin — or a bubble — really is.

Some have even suggested that Bitcoin’s capped supply limits the coin’s ability to meet the needs of a growing economy, also showing that they do not understand the very concept of Bitcoin.

Fortunately, it is not all bad for the world’s largest coin, as it appears that institutional investors, at least, are starting to understand Bitcoin’s value. PayPal is seeing massive profits from its decision to add crypto to its platform. Analysts say that the online payment processor will earn at least $2 billion in revenue due to its Bitcoin business.

Meanwhile, Grayscale’s CEO, Michael Sonnenshein, claimed that institutional investors want to diversify their portfolios. They are keeping BTC, but they also want other assets.

The demand for BTC is still sky-high, however. So high, in fact, that Bitcoin funds have broken past records, which even inspired Goldman Sachs to make moves that would make it more involved with the crypto industry.

Lastly, Former Canadian Prime Minister, Stephen Harper, stated that he believes that BTC could be a possible future reserve currency. 

Technical analysis: Bitcoin dips, then struggles to grow

According to CEX.IO, Bitcoin price has reached its all-time high on January 8th, when it reached $41,999. Unfortunately, the coin never reached $42k, dropping to $38,594 by the end of that very day. The drop continued for the next three days, leading the coin down to $32,370 on January 11th.

BTC then saw a minor correction to $36.6k, which was almost immediately nullified by its price returning to $32.5k. BTC then surged again on January 12th, going up to $39.200 by January 14th. The resistance was too strong for it to proceed, however, and the price was once again rejected, this time to $33.9k, which happened over this past weekend.

For the last two days, however, the coin has been seeing recovery, which once again led its price to $37k, which is where it currently sits, with the exact price at the time of writing being $37,019.

Will Bitcoin keep dropping?

I believe that Bitcoin still has a lot of room to grow. The world’s largest coin has seen a major supply shock, first due to the last year’s halving, and then due to the institutional investors’ surging interest.

While their attention does seem to be expanding to other digital assets, they are still not giving up on Bitcoin, and the demand remains just as strong as before. This is why I expect the coin to end this first quarter with a price of $50k. Bitcoin has hit a bump in the road, but the surge may yet continue. If it does, the coin could even hit $80k by the end of Q2, or even $90k by the end of the year.

The post Bitcoin (BTC) price struggles against a resistance at $37k appeared first on Invezz.

Publication date: 
01/19/2021 - 10:41
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