Bitcoin is ripping higher despite yesterday’s correction.
The cryptocurrency plunged as low as $30,000 yesterday as buying selling rapidly picked up on platforms such as Coinbase, analysts said. This came after Bitcoin peaked at $42,000 late last week. While Bitcoin is not yet in the clear on a short-term time frame, analysts are starting to think that the bottom is in after key technical signs appear.
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On-Chain Trends Still Bullish for Bitcoin
Aleks Larsen, a venture investor at Blockchain Capital, noted recently in an extensive Twitter thread that the on-chain fundamentals for Bitcoin are still strong.
Commenting on Bitcoin’s on-chain trends, the investor wrote:
“6/ Looking pretty good for growth rates in the HODLer segment! Nice and steady growth for BTC through the <span class="wpg-tooltip-term-title">Bear</span></h3><div class="wpg-tooltip-content">Bear market is defined as a decreasing set of prices for various types of assets. A bearish investor wants to profit from the movement of dropping prices. You can think of a bear, swinging his big paw downward on the investment, crushing prices.<p class="wpg-read-more"><a href="https://www.newsbtc.com/dictionary/bear/">» Read more</a><p></div>”>bear market. Retail is starting to pop in but for most of 2020 this was institutionally driven – less additional holders, but much larger position sizes.”
He elaborated that Bitcoin is currently moving $7 billion a day, which shows the value of the network. Ethereum, too, is still seeing strong usage:
“14/ BTC is moving $7B per day on-chain; ETH almost $4B. This doesn’t include tokens or stablecoins.. and stablecoins alone accounted for over $15B of on-chain transfer volume in the last 24 hours. Ethereum is moving over $20B of assets per day, most of which is digital USD!”
Analysts say that on-chain trends show the true nature of the Bitcoin market, as opposed to short-term price trends.
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Overall Trends Positive
Touching on the market trends aside from on-chain data, economist and crypto analyst Alex Krüger says that Bitcoin remains bullish to the most extent:
“Raw demand. Worthy of note was Grayscale reopening private placements late PM. Open interest dropped ~20% and funding rates are now flat to negative. Bullish. This is still a bull market. Bitcoin heats up very easily, and needs to wash up excesses before continuation.”
The investor did note, though, that there are a number of factors that have driven BTC lower in the near term.
These include but are not limited to:
- A bounce in the U.S. dollar against foreign currencies
- Extremely high market funding meant the market was overextended
- Heavy selling pressure by miners, some long-term holdings, and others
- Guggenheim Investments CIO Scott Minerd announcing a short-term bearish view
- Tether fears
- And renewed regulatory fears
$BTC recap
-USD & real rates reversal (temporary IMO)
-extreme funding
-heavy selling: miners, long-term holders, macro & CTAs
-Guggenheim talking price down (wants to buy lower)
-JP bearish (bearish since 18K)
-Tether fears (again?)
-renewed regulatory fears (some scare easily)— Alex Krüger (@krugermacro) January 12, 2021
Related Reading: 3 Bitcoin On-Chain Trends Show a Macro Bull Market Is Brewing
Featured Image from Unsplash Chart from TradingView.com Price Tags: xbtusd, btcusd, btcusdt Bitcoin Just Recovered to $35,000 After Yesterday's 25% Crash