Bitcoin facing $30ks mark: miner’s fault, market reset or worst to come?

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Any well-earned miner’s profit-taking coincides with a natural split throughout the bitcoin bull run to see the price revisit critical support levels.

Bitcoin (BTC) hodlers had a serious test of their resolve on Jan. 11 when the biggest cryptocurrency hit $30,000.

Cryptocurrency market overview on Jan 11, 2021. Source: Coin360

BTC price hits $30,250

Data from Exchanges, Coin360 and TradingView revealed that BTC/USD continued its Bearing Strip after Wall Street opened on Monday, bringing 24-hour losses to 23 per cent.

The change continues the price reset that started over the weekend after Bitcoin reached an all-time high of $42,000.

BTC/USD 1-day candle chart with 21-week moving average (Bitstamp). Source: TradingView

The slow down intensified over Sunday, with the sales burden remaining on Monday, with no respite for traders looking to “buy the dip.”

Although traders were hardly panicked by what remains a normal activity for Bitcoin, forecasts have started to support a break from the kind of parabolic operation of the past few days and weeks.

Market analyst Michaël van de Poppe, a valuable guide for identifying a mid-term floor, is Bitcoin’s 21-week moving average (MA). Currently at $18,000, the metric will rise to follow past market growth, while the price itself may begin to decline, with the two meeting in the middle of the resulting spectrum forming a bottom line.

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“If you’d ask me a scenario for #Bitcoin, I think we’ll see something like this in which the 21-Week MA comes in to play as support too,” he tweeted on Monday.

“Altcoins to do really well from the bottom.”

Spotlight on miner profit-taking

As noted above, a run of more than $40,000 could have inspired miners to pause for gains, with data showing that revenues have hit their highest levels since July 2019. Moreover, after such fast gains, questions revolved around the over-leveraging of the market.

“Long positions had gotten very large, and so prudent risk management dictated that long holders, including miners, take a little off the table,” Chad Steinglass, head of trading at exchange CrossTower told Cointelegraph in private comments.

“The fact that this action occurred over the weekend, when traditional asset players were off from work, and when potential new inflows of cash from new investors were not yet hitting institutional players accounts, lead to order flow shifting to be unbalanced, this time sellers dominating.”

Steinglass added that the status quo will automatically change in favour of bulls when the trading week starts.

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“It remains to be seen whether the start of the work week in the US and the opening of traditional banking hours will bring with it enough support from inflows to balance or overcome the sell interest or not,” he concluded.

Guy Hirsch, U.S. managing director at the eToro trading site, agreed.

“Bitcoin is trading down largely as a result of profit taking. Since we are still so far above the all-time high set before this recent bullish run up, it remains to be seen how much further we can fall,” he told Cointelegraph.

“Though we don’t anticipate this, a fall below $20,000 could be a bad omen for the conviction institutions have behind their Bitcoin allocations, since they largely stepped in around the $20,000 price level.”

ETH/USD 1-hour candle chart (Bitstamp). Source: TradingView

In accordance with van de Poppe’s remarks, altcoins were suspicious of publishing time, with many of the top 10 market capitalisation cryptocurrencies having 20 percent losses on the day. Ether (ETH), the biggest altcoin, rapidly lost $1,000 in trading help at $950.

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Renewed strength in the US dollar, meanwhile, could also hold Bitcoin in place, van de Poppe added in Monday’s analysis.


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