Bitcoin climbs almost back to $ 34,000, with institutional investors now playing a major role again.
The downturn in Bitcoin ( BTC ) below the US $ 30,000 mark was short-lived, as the market-leading crypto currency then gained new impetus, which was generated, among other things, by a US $ 10 million acquisition by MicroStrategy.
As the data from Cointelegraph Markets and TradingView show, Bitcoin was able to achieve a gain of 4.92%, which lifted the price back to an interim high of $ 33,866.
Since the planned corona aid package by Joe Biden’s new US government is becoming more and more concrete, the narrative about Bitcoin as a reserve currency is also getting new nourishment.
The violent price fluctuations in the last few days have led some analysts to the conclusion that Bitcoin is more of a „cyclical“ investment product than a stable hedging instrument. This development is probably due to the fact that smaller private investors have returned to the market with the record run.
Market visualization from Coin360
Even the Bank for International Settlements (BIS) has now taken a liking to digital currency , which is why plans to „central bank of central banks“ an appropriate platform for the use of central bank digital currencies (CBDCs).
An important crypto sentiment barometer has meanwhile switched from “extreme greed” to “fear”, suggesting that investors are selling out for fear of losses. At the same time, this is to be understood as a good buying opportunity, because as investment guru Warren Buffett once said: „Buy when blood flows!“
Institutional investors back on the trigger
Chad Steinglass, Head of Trading at CrossTower, suspects that the Bitcoin return was triggered by the negative comments made by the new US Treasury Secretary Janet Yellen about cryptocurrencies. In the meantime, however, she has put this into perspective .
Before Yellen’s crypto criticism, Bitcoin was still in a price range between 34,000 and 38,000 US dollars, with investors „having waited to see which direction the price would break out of,“ according to the expert.
In this context, Steinglass explains that the short-term price development is determined by the institutional investors:
“At $ 31,000, there is strong support, so not everyone is selling it. We have to wait and see whether this area can be held or whether institutional investors continue to buy. If they do, the more likely that the uptrend will be revived. However, if they withdraw and wait for the political developments first, it could be painful. “
Altcoins on the rise again
Many of the top altcoins have also bounced back from this week’s losses with fresh gains. For example, Polkadot (DOT) is up 7.09%, resulting in a rate of 18 US dollars. Chainlink (LINK), meanwhile, has seen double-digit growth, reaching a maximum of $ 22.31. Tezos ( XTZ ) again creates a plus of 15%, which raises the „alternative cryptocurrency“ to 3.36 US dollars.
The total market capitalization is currently 949.8 billion US dollars, of which 64.4% market share is accounted for by Bitcoin.