The crypto winter seemed to be never-ending, but that all changed with the arrival of the new year. That’s when the crypto market came back from the dead, with Bitcoin surging more than 43% in less than a month.
Is Bitcoin back?
Bitcoin (BTC) literally exploded in January, bringing enormous gains to many investors who decided to enter in the last few weeks. BTC jumped so much that it is considered the strongest price increase in the last decade.
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In January 2013, Bitcoin recorded a whopping 51% price increase, but it was worth a few hundred dollars at that time. Now it’s more than $20,000 per BTC, back above the all-time high level from 2017.
Bitcoin daily chart, source: tradingview.com, author’s analysis
Although Bitcoin retraced from almost $24,000, it is on a good track to reach $25,000 or even more in the near future. This buying activity seems to be institutional, suggesting that whales see this price as attractive to accumulate.
Bitcoin and other cryptocurrencies trade 24/7, unlike equities, so industry experts can analyze order flows all the time to see where buying and selling pressure is coming from. It’s evident that investors bought the dip and reap the fruits as the market didn’t fall further. It’s worth noting that Bitcoin probably bottomed a few weeks before US stock indices did.
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However, investors shouldn’t surrender to fear of missing out (FOMO) and stick to whatever strategy they use. Dollar-cost averaging (DCA) is still a good play as you’re focusing on the long term and ignoring the noise.
Crypto is definitely back. But the likelihood of Bitcoin rallying another 50% next month is very small, so you should be prepared to get in when it falls by 10% or 15% again. The level of $21,300 with the moving average (EMA200) may act as a support, which may be a solid entry zone.
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