The decline in Bitcoin (BTC) below $ 30,000 was short-lived as the leading cryptocurrency found a new wave of support, including when MicroStrategy bought a “$ 10 million retreat”.
Data from Cointelegraph Markets and TradingView show that strong inflows helped push Bitcoin up 4.92% to a daily high of $ 33866.
Given the likelihood that the Biden administration will adopt massive stimulus packages to help revive the US economy, there is talk that Bitcoin will become a reserve currency, again.
While recent fluctuations in Bitcoin have led some analysts to claim that BTC is a cyclical asset rather than a hedge, recent price changes have attracted the attention of retail investors who have shown interest in cryptocurrencies in general.
Even the Bank for International Settlements acknowledged that digital currencies have applications, and the organization has outlined plans to launch a series of digital currency experiments by the central bank this year.
Now that the Bitcoin Fear Index has changed from “extreme greed” to “fear”, it seems that some investors are following Warren Buffett’s advice to “buy when there is blood in the streets”.
Institutional investors fear future regulation
According to Chad Steinglass, Commercial Manager at CrossTower, Bitcoin’s correction may have been triggered by critical comments from the United States. Treasury Secretary Janet Yellen.
Prior to Yellen’s comments, Bitcoin experienced a “consolidation after a correction” and “limited in the $ 34,000 to $ 38,000 range”, with traders waiting to see which aspect of the site would be challenged or destroyed.
Steinglass also explained that Bitcoin’s next move will be determined by institutional investor actions. He said:
“$ 31,000 was a pocket with strong support, so at least not everyone sells. We have to wait and see if the wall stays or if the institutions continue to build. If they do, the trend is likely to bounce and continue. If it disappears in the background in “Waiting for further guidance from regulators, their lack of buying flows will be deeply felt. ”
Alternative currencies are back
Several major digital currencies also recovered well from this week’s correction. Polkadot (DOT) climbed 7.09% to a daily high of $ 18, while Chainlink (LINK) had a double-digit gain over $ 22.31. Tezos (XTZ) also saw an increase in interest that shocked the all-currency currency by 15% to $ 3.36.
The total market value of cryptocurrency is now $ 949.8 billion dollars, and Bitcoin’s dominance rate is 64.4%.