A breakdown below the Descending Triangle support can technically send Bitcoin towards $20,000. Source: BTCUSD on TradingView.com
Short-term fundamentals favored bears.
Bitcoin’s rebound from $ 30,000 came as the U.S. stock market posted its worst daily performance since October. The benchmark S&P 500 and tech-savvy Nasdaq Composite both fell 2.6 percent on Tuesday. Meanwhile, their futures signaled additional losses on Wednesday as the New York session opened.
Gold has been equally bearish for the past 24 hours. A rebound in the US dollar index drove spot rates down 0.13 percent from 10:30 GMT. A stronger greenback has somewhat limited Bitcoin’s ability to see additional gains on Thursday.
Bitcoin Bullish Setup
In his statement to the Wall Street Journal, Olaf van den Heuvel, CEO of Aegon Asset Management, noted that investors are putting their money off the table fearing a slow roll-out of COVID-19 vaccines and lockdowns in some developed countries could affect the inflated wealth.
He also stated that dips will give investors the opportunity to buy risky assets when markets calm down.
Bitcoin bulls see the long-term outlook similarly. On-chain analyst Willy Woo announced earlier this week that institutional investors will lose money if they sell their Bitcoin holdings below $ 30,000. Therefore, it is in their interest to keep the cryptocurrency constant above this level.
“The sales volume comes from new investors who recently took part in the rally,” he said, adding that Bitcoin is at the beginning of a new bull market.
US dollar index recovers from technically oversold areas. Source: DXY on TradingView.com
More bullish calls are coming from traders who view the Federal Reserve’s expansion policy as the focal point for a wild bullish trend in the Bitcoin market. The Federal Reserve announced on Wednesday that it would continue to buy $ 120 billion in bonds every month and keep lending rates near zero.
“Monetizing debt is not good for the US dollar,” said Nick, the founder of Ecoinometrics, a crypto newsletter. “Technically, it’s a devaluation. Anyone worried about preserving their wealth will want to put their money in a store of value. “
Bulls believe Bitcoin could hit $ 100,000 by the end of 2021.