While a handful of altcoins posted double-digit gains, Bitcoin’s rally was halted by resistance at $ 34,000.
The fall of Bitcoin (BTC) below $ 30,000 has been short-lived because it has found a new wave of support, including a $ 10 million ‘buy drop’ move from the top cryptocurrency MicroStrategy.
Data from Cointelegraph Markets and TradingView show that strong entries helped push BTC up 4.92% to its daily high of $ 33,866.
As the Biden administration is more likely to go through massive incentive packages to help revitalize the United States economy, conversations about Bitcoin becoming the reserve currency are beginning to reappear.
Although Bitcoin’s recent volatility has prompted some analysts to say that BTC is a cyclical asset rather than a hedge, the price of recent moves has caught the attention of retail investors who have shown a renewed interest in cryptocurrencies in general.
Even the Bank of International Settlements acknowledged that digital currencies could work, and the organization outlined its plans to launch various central bank digital currency trials this year.
Now that the Bitcoin fear index has changed from “Excessive Greed” to “Fear”, some investors seem to be taking Warren Buffet’s advice to “buy when there is blood in the streets.”
Institutional investors are wary of future regulations
According to CrossTower’s head of trade, Chad Steinglass, the Bitcoin correction may have initially been triggered by critical comments from the US.
Prior to Treasury Secretary Yellen’s comments, Bitcoin was experiencing “post-fix consolidation”. Traders waiting to see which side of the range would push or break, were expecting a value between $ 34,000 and $ 38,000.
Steinglass also explains that Bitcoin’s next steps will be determined by the actions of institutional investors.
“$ 31,000 was a strong support point. So at least not everyone is selling it. We will have to wait and see if that wall continues or institutions continue to accumulate. If they do, the trend is likely to relocate and continue. If they step aside waiting for more regulatory guidance, the shortcomings in the purchasing flows will be felt strongly. ”
Altcoins are returning
Many of the best altcoins have also recovered nicely after this week’s correction. Polkadot (DOT) increased 7.09% to $ 18, while Chainlink (LINK) recorded a double digit increase to $ 22.31. Tezos (XTZ) rose 15% to $ 3.36.
The overall cryptocurrency market cap is currently $ 949.8 billion, with Bitcoin’s dominance at 64.4%.