The increase in trading volume and demand from institutional investors makes analysts expect a new record high from Bitcoin.
The total capitalization of the cryptcoin market is once again above the $1 trillion level, as Bitcoin’s (BTC) bullishers pushed the price to $40,000 on January 14.
Bitcoin’s price reached USD 40,099 in the early hours of the trading day on January 14 according to Cointelegraph Markets and TradingView data before falling back to USD 39,500. This marks a rapid change from the recent drop below USD 31,000 and shows that professional and retail traders are eager to see the BTC price rise despite the massive $1.5 billion settlement this week.
A $13 billion open interest in Bitcoin futures reflects the great optimism of professional traders
Setting the USD 40,000 as support is an important psychological level and a key support that traders are watching. If traders can convert the level into support, then the extension to USD 45,000 is the next move many traders expect.
„The smart money never stopped being allocated to Crypto Engine, even when the late-stage retailers who helped allow the latest rally to exceed $40,000 were largely shaken. Now the momentum is clearly up again, and the price action reflects this sentiment.
4 hour chart for BTC/USDT
While the previous rally above $40,000 was partly due to a wave of retail investor purchases, Guy Hirsch, managing director of eToro’s US wing, sees institutions as the driving force behind the current rally. According to Hirsch, „it would not be a surprise to see a new record high during or even before next weekend.
Institutions continue to buy Bitcoin
Although recent Bitcoin price volatility has given some of the new institutional investors a reason to pause, the more experienced of the financial powers bought the fall of the weak hands, taking full advantage of the big drop.
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It is notable that it is not only the BTC that is receiving institutional attention as the current market cycle progresses. Denis Vinokourov, head of research at Bequant, sees the growing trend as a positive development for the entire cryptomoney ecosystem.
„The open interest in Bitcoin futures may be on a relentless rise, but this did not prevent capital from flowing into the relevant altcoins and derivatives as well. This, in turn, suggests compartmentalization, specific asset allocation and further maturation of the broader market.
From here anything can happen
As Cointelegraph reported, since the fall of BTC on January 11, some of the most prominent figures in space have been more bullish than ever and are also calling for Bitcoin to reach a new all-time high in the near future.
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Decentrader’s founder, filbfilb, said: „The immediate future of the main cryptomoney is 50/50 as to what happens now. A move above $40,000 will establish a new level of support in which „the historical high is likely to be tested again.
In a private conversation with Cointelegraph the analyst stated
„The price action is very similar to both the rejection and correction of the USD 35,000 and the USD 20,000. With the USD 35,000 we managed to exceed them; with the USD 20,000 we had to test the lows again“.
Regardless of what happens, the analyst sees the USD 40,000 as a „key turning point that will dictate the next two weeks“.
Daily chart for BTC/USD.
The altcoins are also seeing positive price action for the third day in a row. Ether (ETH) rose 9% to USD 1,245 and Polkadot (DOT) found an extra boost by rising 33% to a new high of USD 14.92.
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The capitalization of the entire cryptcoin market is currently USD 1.04 billion and the Bitcoin domain rate is 69.1%.