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Bitcoin Will Not Go Down Below $28,000, Asserts On-Chain Analyst

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A strong downside correction in the Bitcoin market seen earlier this week is threatening to become a full-fledged bear trend as BTC/USD struggles to move past certain technical resistances.

Many traders agree that the pair could continue its move lower, forming a potential Head and Shoulder pattern, a bearish reversal structure. As Bitcoinist covered here, the pattern’s technical downside target is below $20,000, a move that would take Bitcoin down by more than 50 percent from its record high near $42,000 established on January 8.

Bitcoin, cryptocurrency, BTCUSD, BTCUSDT

Bitcoin struggles to move past $35,000. Source: BTCUSD on TradingView.com

Other potential bearish indicators come from the macroeconomic landscape. The brighter US growth prospects challenged assumptions about a longer US dollar bear market. After finishing 2020 down by 6.76 percent, the greenback recovered by 1.2 percent in the first week of 2021, forcing analysts to rethink their long-term bearish bias.

That stopped the Bitcoin bull run midway also as traders decided to secure their profits at local tops. Now, a deeper price correction is witnessing limited over-the-counter deals, minimal stablecoin inflow into exchanges, and an increase in miners-led sell-off—all pointing to a bearish continuation in the Bitcoin market.

Bitcoin, cryptocurrency, BTCUSD, BTCUSDT

Bitcoin Outflow from Coinbase Pro wallets declines, pointing to fewer OTC deals. Source: CryptoQuant

However, one analyst believes that is not the case.

Ki-Young Ju, the chief executive officer at CryptoQuant — a blockchain analytics firm in South Korea, asserted that the BTC/USD exchange rate would not fall below $28,000.

“There are many institutional investors who bought BTC at the 30-32k level,” Mr. Ju said. “The Coinbase outflow on Jan 2nd was a three-year high. Speculative guess, but if these guys are behind this bull-run, they’ll protect the 30k level. Even if we have a dip, it won’t go down below 28k.”

Technicals Back Bitcoin Bulls

More seasoned analysts support a potential Bitcoin price pullback as the cryptocurrency traded 16 percent higher from its local low near $30,000.

One independent chartist said the BTC/USD exchange rate would not slip below $32,000 based on technical support that lingers around the level. The pseudonymous entity presented the pair inside a Symmetric Triangle pattern, confirmed by at least two reactive tops on a downward sloping trendline and two reactive lows on an upward sloping trendline.

Bitcoin, cryptocurrency, BTCUSD, BTCUSDT

Bitcoin trade setup, as presented by Rekt Capital. Source: BTCUSD on TradingView.com

“Bitcoin isn’t going any lower than $32,000 as long as the uptrend line continues to hold,” the analyst stated, putting the cryptocurrency’s potential upside target near the downtrend line—that is above its previous record high near $42,000.





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Bitcoin

Bitcoin needs clear regulations to be less volatile, Bridgewater analyst says

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A senior analyst at asset management firm Bridgewater believes that regulation could potentially make Bitcoin (BTC) a good asset for institutional investors.

Bridgewater director of investment research Rebecca Patterson claimed that regulatory certainty around Bitcoin would solve some of the cryptocurrency’s biggest problems associated with high volatility and low liquidity.

In a Feb. 24 interview with Bloomberg, Patterson said that issues like volatility and liquidity remain the main hurdles for Bridgewater’s potential move into Bitcoin.

“Right now Bitcoin can move 10% on a tweet, that’s not exactly a store of wealth for most institutional investors. So the volatility of Bitcoin is about 10 times that of your dollar, it’s still double that of the Venezuelan bolivar,” the executive said.

Patterson went on to say that both the volatility problem and liquidity issues would subside if Bitcoin becomes a better-regulated asset:

“The more you get a real regulatory ecosystem developing around Bitcoin and other currencies, the more other types of investors are going to be comfortable coming in, that’s going to bring liquidity, that’s going to reduce the volatility.”

“So I guess if there was one thing I were watching first, it would be seeing more regulatory certainty,” Patterson said, adding, “I’m not sure when that’s going to come in the U.S.” 

Patterson also said that she doesn’t look at Bitcoin as an “alternative currency” but rather as digital gold. “If anything, it’s an alternative to gold or digital gold. I think that would be the better comparison,” she said. Patterson said that many investors have been looking to Bitcoin over concerns about inflation triggered by central bank money printing. However, for Bridgewater, Bitcoin still needs to prove its status as digital gold:

“As institutional investors, we don’t know yet if it’s going to be digital gold, it may be over time, but I don’t think we can say that with confidence yet. And that affects whether or not our client should own it.”