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A handful of altcoins posted double-digit gains while Bitcoinâs relief rally was halted by resistance at $34,000.
Bitcoinâs (BTC) tumble below $30,000 was short-lived as the top cryptocurrency found a new wave of support, including a $10 million âbuy the dipâ moment from MicroStrategy.Â
Data from Cointelegraph Markets and TradingView shows the strong inflows have helped lift BTC 4.92% to a daily high at $33,866.
As the prospect of the Biden administration passing massive stimulus packages to help get the United States economy going again, conversations about Bitcoin becoming a reserve currency are beginning to pop up again.
Although Bitcoinâs recent volatility has some analysts saying BTC is a cyclical asset rather than a hedge, the price recent movements have caught the eye of retail investors who have shown a renewed interest in cryptocurrencies in general.
Daily cryptocurrency market performance. Source: Coin360
Even the Bank of International Settlements has acknowledged that digital currencies may have use and the organization has outlined plans to roll out a variety of central bank digital currency trials this year.
Now that the Bitcoin fear index has flipped from âExtreme Greedâ to âFear,â some investors appear to be taking Warren Buffetâs advice of âbuying when there is blood on the streetsâ.
Institutional investors are wary of future regulation
According to Chad Steinglass, head of trading at CrossTower, Bitcoinâs correction may have initially been triggered by critical comments fromU.S. Treasury Secretary Janet Yellen.
Prior to Yellenâs comments, Bitcoin was experiencing a âpost-correction consolidationâ and was ârangebound between $34,000 and $38,000â with traders âwaiting to see which side of the range would be challenged or broken.â
BTC/USDT 4-hour chart. Source: TradingView
Steinglass further explaind that Bitcoinâs next steps will be determined by the actions of institutional investors. He said:
â$31,000 was a pocket of strong support, so at least not everyone is selling. Weâll have to wait and see if that wall remains, or if institutions continue to accumulate. If they do, itâs likely that the trend will re-establish itself and continue. If they move to the sidelines waiting for more regulatory guidance, then their lack of buy flows will be acutely felt.â
Altcoins bounce back
Many of the top altcoins also recovered nicely from this weekâs correction. Polkadot (DOT) rallied 7.09% to a daily high at $18, while Chainlink (LINK) posted a double-digit gain and topped out at $22.31. Tezos (XTZ) has also seen a surge in interest which boosted the altcoin by 15% to $3.36.
The overall cryptocurrency market cap now stands at $949.8 billion and Bitcoinâs dominance rate is 64.4%.
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.