Bitcoin Price Today (January 27): Bitcoin stalled, Other cryptos dive
|Bitcoin trading on Bitstamp since Jan. 23. Source: TradingView|
Tuesday looked like a fairly priced day for long bitcoin leverage, as funding rates dipped a bit from Monday. That was a change from the excitement over the past 90 days, when margin rates could go as over 0.2% on some venues during the crazy price run-up to Jan. 10’s all-time high of $40,986.
Accordingly, Jeff deGraaf, one of Wall Street’s leading analysts, said that Bitcoin price is likely to drop below $ 30,000, according to AZCoin News.
He stated:“Bitcoin is likely to face a plunge in the near term if critical support levels are consistently breached.”
Bitcoin’s price dropped as much as 10% during early trading hours on Tuesday as bitcoin miners started selling a large amount of the cryptocurrency for the first time since October. There is not enough demand to absorb the additional coins on the market because institutions want an idea of how the new Biden Administration will view bitcoin and other cryptocurrencies.
At the press time, bitcoin was trading at $32,254.59, down 3.04% in the past 24 hours, according to CoinDesk’s BPI. The drop occurred after the world’s oldest cryptocurrency reached nearly $35,000 on Monday, noted Constantine Kogan, partner at investment firm Wave Financial, who is also bearish on current market conditions. “I expect a decline to $29,000,” he told CoinDesk. “Apparently some of the holders and whales sold off their positions.”
“Many crypto natives and macro traders were anticipating a ~30% pullback off the all-time high from two weeks ago,” noted Brian Mosoff, chief executive officer for investment firm Ether Capital. “Now that it seems to have stabilized in the low $30,000s, traders are treating this as an opportunity to lever up and go long ahead of the next leg up.”
While Bitcoin is flat, many other cryptocurrencies are in the red and most of the coins are losing momentum.
Specifically, Polkadot fell 3% to $ 17, the capitalization recorded $ 15.2 billion. XRP fell 1.2% to $ 0.267, pulling the market cap down to $ 12.1 billion. Chainlink dropped 1.2% to $ 22.8, the market cap was recorded at $ 9.1 billion. Litecoin is down 2.3% to $ 0.258, the temporary market cap recording at $ 5.7 billion.
Bitcoin miners’ position index, a ratio of the number of bitcoin leaving all miners’ wallets to that number’s one-year moving average, reached an eight-year high last week and is still above 2.0, according to data from on-chain analytics firm CryptoQuant. Any value above 2.0 indicates that most miners are selling.
Miners appear to have been selling in order to meet some of their operational costs.
“For the first time in a while, it appears miners sold some fairly substantial holdings to raise cash as we expected on a rally after October,” Neil Van Huis, director of sales and institutional trading at Blockfills, told CoinDesk. “With a need to allocate capital to more (and newer) mining rigs, taking bitcoin off of their balance sheet for cash at three or four times higher prices 30-60 days after the wet season ended in China was about the best scenario [miners] could’ve asked for.”
Not enough buyers
While miners continue selling bitcoin, it seems there aren’t enough buyers, especially from the institutional investors, to meet the sell side.
The “Coinbase premium,” the gap between Coinbase’s BTC/USD pair and Binance’s BTC/USDT pair involving the tether stablecoin, has not shown strong or consistent numbers above $50 after it went negative last week, according to data from CryptoQuant.
When this metric goes above $50, it usually indicates stronger spot buying pressure from Coinbase, CryptoQuant Chief Executive Ki Young Ju told CoinDesk. And when there are no USD spot inflows, the premium goes down.
Meanwhile, all stablecoins reserved on all exchanges hit a new all-time high on CryptoQuant’ tracker. This, coupled with no U.S. dollar spot inflows, means the current market is predominantly driven by crypto natives such as crypto hedge funds and market makers. Such market participants are more comfortable with buying and selling bitcoin with stablecoins, Ki said.
“If there’s no spot USD inflows, no more bull runs,” Ki added.
BTC Price Prediction Q1 2021
The US government is going to launch another COVID-19 stimulus and most probably we are seeing the tip of the iceberg of the global economic crisis, Tech Bullion reported.
Investors across the world are rushing to buy Bitcoin and the number one cryptocurrency is being compared with the cult safe-haven asset gold. Bitcoin dominance is at 1-year peak currently and numerous corporates and hedge funds are obtaining BTC positions on a large scale.
Paypal launched a new service in the US enabling users to buy, hold and sell Bitcoin and it created a sudden upsurge of demand for BTC. BTC found its new ATH of $41,940 on Jan 08, 2021, but dropped a bit after that. It is very clear that the BTC bulls are buying the dips and BTC can hit $100,000 in the long-term. We can expect the price of BTC above $50,000 by Q1 end.
* For more updates and predictions of daily bitcoin and other cryptocurrencies prices, please click here!
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