Operating laterally for a while could be healthy for Bitcoin.
After rising above USD 40,000 and a correction to almost USD 30,000, Bitcoin (BTC) has recovered once again. However, stopping before going back up beyond highs near USD 42,000 could be good for the asset, according to Brian Krogsgard, a trader and podcaster who calls himself LedgerStatus on Twitter.
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„The Bitcoin correction was healthy in a strong upward environment, which Immediate Edge means a return to the 20-day moving average,“ Krogsgard told Cointelegraph on Thursday. „With a strong rebound now, it’s time to see if it will continue to rise immediately or spend more time in a prolonged consolidation, which I think would be healthy.
Bitcoin barely broke above $40,000 on Thursday morning before falling back slightly to $39,000, according to TradingView.com data at the time of this writing.
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Breaking the $36,000 mark was a major move for the asset, according to comments from CryptoWendyO, a trader and analyst on Twitter. „Unless we recover the $36,000, I don’t rule out a further drop,“ she told Cointelegraph on January 12, before Bitcoin’s recovery topped the level. The asset recently surpassed USD 36,000 with conviction. The 4-hour chart of Bitcoin’s price now shows a higher minimum.
The updated CryptoWendyO commentary shows optimism in the price at present. She told Cointelegraph on Thursday:
„Bitcoin has experienced an amazing rebound in my support box of ~ USD 34,200 after that twisted drop of ~25%. I myself am incredulous, however, the fundamentals of 2020/2021 are different to Bitcoin’s previous history, I currently believe that we will continue to climb and hopefully invest USD 42,000 and go on a similar run after we experienced a fall on 7/1/2021 from ~USD 34,200 to ~USD 28,000 to test the ~USD 48,000“.
Regarding the recent price action, Krogsgard sees a correlation with one of the traditional market Bitcoin products. „It seems that the closing and reopening of GBTC’s deposits had a real impact on the demand for currencies, as the reopening of its market set the tone,“ Krogsgard postulated. „I believe that we will continue to see institutional demand in any downturn“.
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Run by Grayscale, GBTC is essentially the stock form of Bitcoin, with each share backed by a fraction of a Bitcoin. The company suspended fiduciary investments in BTC in December and reopened them this month.
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