The world’s largest cryptocurrency must pass the January test before making a significant upside move.
Bitcoin is set to end 2020 with more than 300% gain. The cryptocurrency is entering 2021 with bullish momentum after breaching the $29,000 price level. Despite the positive market sentiment, Bitcoin investors are worried about high volatility and an uncertain regulatory environment.
The world’s largest cryptocurrency has seen consistent growth in the last 6 months without a major correction. Institutional money fueled the demand for Bitcoin, and the price jumped from $9,000 in July to $29,000 in December this year.
January has always been a volatile month for the cryptocurrency market. Investors are expecting a similar trend in 2021 as well because of the growing demand. The cryptocurrency market has not seen substantial selling pressure in recent months because of institutional accumulation. But, is it possible for the market to continue the bullish momentum without a dip? Maybe not.
Joaquim Matinero Tor, a cryptocurrency observer and Blockchain Associate at Roca Junyent, told Finance Magnates that he expects Bitcoin to fall under $18,000 before making an upside move. “I think the price of Bitcoin will fall under 18,000 dollars and then rise back. Whale investors will sell once the financial year is over. So, January may be a rollercoaster ride for the cryptocurrency market,” he mentioned.
Bitcoin’s January Test
The reason January 2021 is a testing month for Bitcoin and other cryptocurrencies is that most of the investors who entered the crypto market in 2020 will be looking forward to closing their positions in order to book some profits. Additionally, the US Treasury is planning to implement strict KYC regulations on crypto exchanges. The SEC’s recent action against Ripple sparked a $50 billion sell-off in December and if something similar happens with other cryptocurrencies, it will create panic among retail investors.
Apart from rising volatility and regulatory uncertainty, significant Bitcoin transactions by unidentified cryptocurrency users have raised concerns in recent days. Whale Alert, a blockchain tracker, and analytics system identified the movement of nearly 17,000 BTC on the last day of 2020.
Jan-2-2021 05:02:18 AM