Bitcoin is rising above $30,000 after steep losses
Last Updated on January 6, 2021
Bitcoin Market Overview
Bitcoin fell sharply by up to 16.33% towards $ 28,000, close to posting the worst daily performance since March 2020, however, the benchmark digital currency has barely managed to escape the bearish attack to bias towards positive buying and is currently trading above $ 30,000. It faces strong resistance near $ 33,200 and $ 33,500.
This rapid recovery was one of the main reminders that made Bitcoin’s continued rise (from $ 3858 in March to $34,810 in January) very different from the infamous rally in December 2017, as every currency decline attracts a new wave of buyers, confirming that it can To continue its further upward trend until 2021.
Here are the three reasons why Bitcoin prices may rise to retest record highs this week:
- 1. More corporate money
The past twenty-four hours have seen two major financial firms confirm their entry into the crypto market. The director of the Singapore hedge fund, “Three Arrows Capital,” revealed that more than $ 1 billion had been placed in the “Grayscale Bitcoin Trust” in its file with the US Securities and Exchange Commission (SEC).
Meanwhile, New York-based “SkyBridge Capital” has invested about $ 25.3 million to launch the “SkyBridge Bitcoin Fund LP”, and the company’s press release indicated that they plan to provide investors with an institutional tool to access Bitcoin through its new product.
The news was evidence that institutional capital had entered Bitcoin not only to speculate but also to build reliable and regulated investment infrastructures.
- 2 – The decline of the US dollar
Bitcoin is now trading in reverse against the US dollar in the medium to long term, this is evident in their performance against each other in 2020, while the dollar closed down nearly 7% against a basket of major foreign currencies, the cryptocurrency rose by more than 300%.
The dollar is now looking equally bearish this week and the rest of 2021, as it opened its first trading day of the year in negative territory, and lost ground against major emerging market currencies, so analysts reaffirmed that the depreciation of the US currency would increase demand for riskier assets.
The same month saw the Federal Reserve launch an endless bond-buying program to protect the US economy from the Coronavirus pandemic, and the central bank also contained its benchmark lending rates near zero, a policy that remains intact as we enter 2021.
- 3. Minutes of the Federal Commission
Bitcoin’s ability to maintain its short-term bullish bias also depends on the future direction of the Federal Reserve. Bank President Jerome Powell said last month that they will continue his broad stimulus policy to avoid a deeper recession, which includes buying $ 80 billion a month in Treasury bonds and a monthly purchase of $ 40 billion in securities, cautious guidelines in the minutes could allow Bitcoin to regain track of about $ 34,000 in the latter half of the week.
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