Bitcoin surged sharply above $ 37,500 on Thursday and after that surge it became too expensive to buy. However, the cryptocurrency continues to offer attractive buying opportunities with lower risk profiles.
Investment advisors at TradingShot created a fractal-based view of Bitcoin’s previous parabolic movement in 2017 and the price corrections that occurred during this period. After each retest, they identified the purchasing patterns of specific tech support levels that push prices to new peaks.
Looking back, Bitcoin corrected four times 30 percent, three times 20 percent, twice 18 percent, and once 40 percent during its bull run in 2017. Meanwhile, the cryptocurrency has continued its upward trend after testing its 100-day moving average three times and reaching the 50-day moving average twice.
TradingSpot strategists compared the 2017 bull run to the current one, considering exponential scales in volatility and price returns. Just like in 2017, Bitcoin’s movement between March 2020 and its ongoing rise shows an increase in value and market cap of up to 880 percent. And recently, the cryptocurrency has continued its upward trend after falling 20 percent from its record high above $ 34,800. As of January 7, BTC reached a new record high of $ 37,823. In the analysis, it was emphasized that buying Bitcoin should not be afraid during a 20% drop.
The analysis also indicated that investors could be prepared to buy Bitcoins even if the price corrected 30 percent from current levels. Such a move will lower the cryptocurrency to 50-DMA. Besides, a 40 percent drop allows BTC to test 100-DMA. The following expressions were used in the analysis note:
“THIS IS ONLY TO SHOW THAT IF YOU ARE A BUYER, YOU SHOULD NOT PANIC ABOUT [PRICE DROPS] AND YOU SHOULD HAVE CALM TO BUY IT.”
The bullish outlook has also emerged as institutional investors are increasing their risk in the Bitcoin market. Data revealed by CryptoQuant, a blockchain analytics platform, shows that major investors bought the cryptocurrency up to a price of $ 30,000 on Jan.2, which means a long-term upward surge.
“Coinbase exit was at an all-time high,” CryptoQuant CEO Ki-Young Ju said on Jan. 2, adding: “Apparently, institutions bought BTC when the price was over 30,000. The Bitcoin bull market is not over. ” Meanwhile, he noted that the total inflow of stablecoins across all exchanges has increased this week and investors will be able to use dollar-pegged tokens to buy more cryptocurrencies.