Grayscale CEO Michael Sonnenshein said during an interview with Bloomberg that pension funds and endowments had already begun investing in the Grayscale family of brands in addition to hedge funds. It means that a wide variety of institutions are collecting Bitcoin (BTC).
Investment banks have already agreed that they do not want to be left behind when this movement gathers momentum. A new Morgan Stanley filing suggests an acquisition of a 10.9 percent interest in MicroStrategy, a transaction that was obviously made to acquire Bitcoin exposure. MicroStrategy has been a proxy play on Bitcoin, with 70,470 Bitcoins in their hands.
Several observers believe that buyers who have been closing their gold holdings and purchasing Bitcoin may also be the new market. CNBC Mad Money show host Jim Cramer commented on a question about the recent underperformance of gold that retail money might pour into cryptocurrencies.
Although optimistic comments on retail sales have been released, traders should still keep track of the individuals that have been selling since the rally will lose steam at some stage and investors will look to book gains.
Analysts at Content Indices say that as Bitcoin reached $40,000 on Jan. 7, super whales could have booked gains and more selling from whales may also be the cause for the price decline seen today. Aggressive purchases at lower levels resulted in a quick turnaround, though.
But it did not stop the sale of whales. Over the past few days, Bitcoin whales in South Korea have been selling their positions, as seen by the numerous exchange deposits of $100 million. Although selling has not triggered a huge rush to exit, traders should be cautious about their positions because it could lead to a sharp decline even though a few major investors in the U.S. rush to exit.
If Bitcoin corrects sharply, most altcoins are also likely to follow suit, but these top-5 cryptocurrencies could outperform in the short term if Bitcoin remains strong.
To spot the crucial thresholds to watch, let’s examine their tables.
Over the past few weeks, Bitcoin has been on a clear upward trajectory, but the surge has driven the relative strength index (RSI) into overbought territory. Although stocks can stay overbought for a long time, the probability of a sharp downturn rises with any rise.
The intraday low made on Jan. 8 at $36,518.73 is the first support on the downside. It would mean that traders are not booking gains in a rush and are purchasing on small dips if the market bounces from this amount.
The uptrend could restart with the next aim goal at $45,000 and then $50,000 if the bulls drive the market beyond $41,959.63.
If the bears collapse below the price of $36,518.73, though, the BTC/USD pair could decline to the 38.2 percent Fibonacci retracement stage of the up-most move’s recent leg at $32,816.03.
This is a critical tracking assist because if it cracks, many traders may start to panic and sell their positions, resulting in a deeper correction to the retracement stage of 61.8 percent at $27,167.10.
The 4-hour chart reveals that the price is actually locked within a range of $38,000 to $41,959.63. The uptrend can restart if the bulls can drive the price above the range.
In the other hand, if the bears lower the price below the range’s help, it would imply traders’ profit-booking.
The next downside support is the 50-simple moving average, which in this leg of the upward trajectory has not been decisively broken during prior corrections. If this support cracks, it would then signify a potential shift in direction.
Cardano (ADA) is consolidating in an uptrend at present. Over the past few days, the altcoin has been caught between $0.2632811 and $0.3542857, which has brought down the RSI from deeply overbought values.
At present, the bulls face strong resistance near the level of $0.34, but one encouraging indication is that there are still no signs of panic selling. The next leg of the uptrend will restart if the bulls can bring the market above the overhead resistance.
The ADA/USD pair has a $0.449 range target, but the bears are expected to erect a rigid resistance around $0.40. If the bulls would drive the market above the support thresholds, however, the pair could rebound at $0.50 to the psychological level.
If the pair switches down and breaks below the 20-day EMA ($0.234), this bullish opinion will be invalidated. Such a shift would mean that the upward trajectory might have culminated.
The 4-hour chart reveals that a symmetrical triangle is formed, which typically serves as a pattern of continuity. The bulls are trying to defend the 20-EMA at present. The bulls will continue to drive the pair above the triangle if the price bounces off the current levels.
The pair can rally to $0.525 if they succeed. However, the next support is at the 50-SMA if the pair fall below the triangle, so if this support also cracks, the decrease will continue to $0.20.
EOS has been trading inside a large range between $2.20 and $3.949. The altcoin turned down sharply from the overhead resistance today, which shows aggressive selling by the bears.
However, the EOS/USD pair may again try to climb to the overhead support around $ 3,949 if the bulls protect the moving averages. A breakout of this stage would signal the beginning of a new upward trajectory that could hit $5,698.
If the bears sink and hold the price below the moving average, this opinion would be invalidated. Such a move could lead to a drop in the range’s help at $2.20 and that could keep the pair range-bound for a few more days.
The 4-hour chart reveals that the overhead resistance price dropped sharply and split below all moving averages. It shows violent selling by the bears.
If the price bounces off the current level and increases above 20-EMA, though, it will mean that the deal might be over. Then the bulls can try to take the price to the overhead resistance again.
Conversely, the pair may fall to $2.50 and then to $2.20 if the bears hold the price below $3.
THETA is already consolidating for the next few days in an uptrend. The market has produced lower highs, which means that selling from the bears is faced with any effort to recover.
A small plus, though, is that the bulls have not allowed the market to slip below the $1.7611 support price. The 20-day EMA ($1.74) is only below this amount and it is expected to be vigorously guarded by the bulls.
The THETA/USD pair can rise to $2.51 if the bulls are able to drive the price beyond $2.20. In the positive territory, the upsloping moving averages and the RSI indicate that bulls are in charge.
If the bears continue to sell and the pair sinks below the 20-day EMA, it may open the door to the 50-day SMA ($1.12) for a decline.
A descending triangle formation is illustrated in the 4-hour map. A equilibrium between supply and demand is indicated by the flat moving averages and the RSI just below the midpoint.
The falling triangle trend would finish if the bears will sink and hold the price below $ 1,7611, and that will drag the price down to $ 1,01.
In the other side, if the bulls are able to drive the market over the triangle, the bearish trend is invalidated. This could drive the market to $2.51 and the up-move could cross $2.95 if the bulls could thrust the price beyond this resistance.
AAVE is currently on an upward trajectory as it tends to deliver higher highs and higher lows. The long wick on today’s candlestick, though, reveals that bears are selling vigorously at higher prices.
The moving averages upsloping and the RSI above overbought territory show that the direction of least resistance is to the upside. A turnaround off the 20-day EMA ($99.93) would confirm that traders are continuing to buy on dips if the AAVE/USD pair corrects more.
If sellers can drive the price beyond $135.99, the uptrend will start at $150.99 as the next possible target.
If the bears drop below the 20-day EMA price, however, the pair could drop to the 50-day SMA ($85). A fall below this support could lead to a drop to $70 and then to $60.
The 4-hour map suggests that within an ascending channel, the pair is trading. The bulls are trying to defend the 20-EMA at present. The price could be taken to the resistance line of the channel by a quick rebound.
A break above the channel could result in a sharp up-move, but the pair will trade within the channel for a few days if the price turns down from the resistance line of the channel.
A drop to the support line of the channel is likely if the price breaks below the 20-EMA. The uptrend would stay intact with a solid recovery off this support, but a fall below it could signify a shift in direction.
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