Bitcoin upswing fails at 34,000 US dollars

Bitcoin upswing fails at 34,000 US dollars, altcoins also on the rise again

Bitcoin almost climbs back up to 34,000 US dollars, with institutional investors now playing a supporting role again.

Bitcoin’s (BTC) dip below the US$30,000 mark was short-lived, as the Bitcoin Code market-leading cryptocurrency subsequently received a fresh boost, generated in part by a US$10m purchase from MicroStrategy.

As data from Cointelegraph Markets and TradingView shows, Bitcoin made a gain of 4.92% as a result, lifting the price back to an interim high of US$33,866.

As the planned Corona bailout package of the new US administration of Joe Biden takes on more and more concrete features, the narrative around Bitcoin as a reserve currency is also getting new nourishment.

However, the sharp price fluctuations in recent days have led some analysts to conclude that Bitcoin is more of a “cyclical” investment product than a stable hedge. This development is probably due to the fact that with the record run, smaller private investors have again increasingly entered the market.

Market visualisation by Coin360

Even the Bank for International Settlements (BIS) has now taken a liking to digital currencies, which is why the “central bank of central banks” is planning a corresponding platform for the use of central bank digital currencies (CBDCs).

Meanwhile, a key crypto sentiment barometer has switched from “extreme greed” to “fear”, suggesting that investors are selling off for fear of losses. At the same time, this should be seen as a good buying opportunity, because as investment guru Warren Buffett once said, “Buy when there’s blood!”

Institutional investors back in the driver’s seat

Chad Steinglass, the head of trading at CrossTower, suspects that Bitcoin’s rebound was triggered by new US Treasury Secretary Janet Yellen’s negative comments towards cryptocurrencies. However, she has since put them into perspective.

Before Yellen’s crypto-criticism, Bitcoin was still in a price range between 34,000 – 38,000 US dollars, with investors “waiting to see in which direction the price would break out of it”, according to the expert.