On January 12, the price of Bitcoin (BTC) rebounded slightly as the price tried to re-enter the $ 37,000 range, but at the time of writing, the increase in sales is pushing the price back to $ 32,000 mark.
While the bearish price action may have shaken younger investors who are not familiar with bitcoin’s whip volatility, the recent 28% drop doesn’t even put it on the list of the 5 worst BTC setbacks in history. In fact, today’s 20% recovery was one of the biggest one-day Bitcoin recoveries of all time.
Despite Bitcoin’s rapid 20% recovery, many analysts have expressed caution, warning that the top cryptocurrency has not yet come out of danger due to a high rate of funding in the future market and the growing strength of the US dollar index (DXY).
Long-term and institutional investors seem indifferent to the correction and probably believe it is nothing more than a short-term retracement.
Goldman Sachs analysts suggested that recent developments are a sign that “the market is beginning to mature” and that the sector has great growth potential because institutional involvement represents only 1% of the current market.
Search for support actions
While Bitcoin and altcoins have made a healthy recovery, traditional markets have continued to face pressure due to the possibility of continued political turmoil in the United States and concerns about the economic impact of the new restrictions on COVID-19.
Signs of a strengthening dollar are putting pressure on global financial markets and some analysts have even warned that a strong dollar is bad for Bitcoin’s price.
The main indices were under pressure all day and ended mixed at the close, with the S&P 500 and Dow up 0.04% and 0.19%, respectively, while the NASDAQ closed down 0.08%
Altcoins show strength as Bitcoin tries to find a new trading range
Bitcoin now appears to be entering a new range where $ 30,000 is support and the $ 35,000 level can act as resistance. As this occurs, selected altcoins have increased and traders have capitalized on BTC stability by switching to altcoins.
The price of Ether (ETH) has risen to over $ 1,000 and, at the time of this writing, altcoin was trading for $ 1,050. Stellar (XLM) also recovered well on Tuesday, with the digital asset gaining 22.16%.
The DeFi sector also continued to show strength with Maker’s governance token (MKR) rising more than 31%. Synthetix (SNX) and AAVE also gained 23%, as both reached new highs for the year.
The overall capitalization of the cryptocurrency market is now $ 924.5 billion and Bitcoin’s dominance rate is 68.4%.