Bitcoin (BTC) continues to move within a pennant trend in a tightening band, and although the price has risen above the 20-day moving average, it is obvious that bulls and bears are competing for the path the digital commodity would go.
JPMorgan research analyst Nikolaos Panigirtzoglou recently underscored the value of bitcoin breaking out over $40,000 quickly in order to avoid being hit by an exodus of “trend-following” buyers that might exacerbate the correction last week.
According to Yves Renno, Head of Trade at Wirex, Bitcoin is “consolidated above $35,500” but Renno still sees a strong overall trend in the industry.
Renno also said that the most recent correction was potentially used as an excuse to purchase for big, institutional buyers, as demonstrated by a rise in the number of BTC whales and a “low to average” mining supply.
Renno said that investors should prepare to see a “continued period of high volatility with a positive medium-trend” in the coming weeks and months based on behaviour in the derivatives sector.
“The open interest is always hitting new ATHs, which makes the market even riskier since it implies that there is a higher risk of liquidation during a correction, meaning collateral sold, which typically amplifies the corrections.”
Ether (ETH) is still looking to demonstrate “continued strong price momentum” as Renno sees it, powered by the launch of Eth2 and the forthcoming launch of CME futures in February. Eth2 is also expected to improve the DeFi economy in general, as the ecosystem as a whole would benefit from reduced transaction costs and less congestion.
Positive developments on the regulatory front
News that new President Joe Biden plans to appoint Gary Gensler, a professor who formerly taught blockchain and cryptocurrencies at MIT, as Chairman of the U.S. Securities and Exchange Commission, presented the crypto market with a short-term boost in sentiment.
Bitcoin has got a big vote of confidence from Stephen Harper, former Prime Minister of Canada. Harper suggested that there might be a role for Bitcoin as part of “a basket of reserve currencies to replace the dollar.”
Although Bitcoin’s price has been trading sideways, crypto pundits have been calling for Ether to break out and join BTC’s parabolic step. In the last hour, Ether managed a bullish breakout in his BTC pair and the USD pair. At the time of publication, the highest-ranked altcoin was 5.43 percent higher and traded $1,327.
Despite stepping back on Monday, Polkadot (DOT) still appears to be one of the top-performing altcoins, seeing a 75 percent rise in price last week and tossing XRP as it looks at the $20 mark. Currently, DOT is trading at $16.80.
The total market cap for cryptocurrencies currently stands at $1.03 trillion and Bitcoin’s domination percentage is 65.7 percent.
429 Interactions, 6 today