A handful of altcoins made double-digit gains, while the Bitcoin Rally relief was interrupted by resistance at $34,000.
Bitcoin bulls are frustrated by $34,000 resistance while Altcoin rally continues MARKET
The fall of the Bitcoin (BTC) to under $30,000 was short-lived as the largest cryptomeda found a new wave of support, including a $10 million ‚buy the dive‘ moment from MicroStrategy.
Data from Cointelegraph Markets and TradingView show that strong inflows helped raise BTC 4.92% to a daily high of $33,866.
With the prospect of the Biden government approving huge stimulus packages to help get the U.S. economy back on track, talks of Bitcoin becoming a reserve currency are beginning to emerge again.
While the recent Bitcoin volatility has made some analysts claim that the BTC is a cyclical asset rather than a hedge, recent price movements have caught the attention of retail investors who have shown a renewed interest in crypto currency in general.
Daily performance of the cryptomotic market. Source: Coin360
Even the Bank of International Settlements has recognised that digital coins can be used and the organisation has outlined plans to launch a variety of central bank digital currency tests this year.
Now that Bitcoin’s fear index has changed from „extreme greed“ to „fear,“ some investors seem to be following Warren Buffet’s advice to „buy when there is blood in the streets.
Institutional investors are worried about future regulation
According to Chad Steinglass, CrossTower’s chief negotiator, the Bitcoin correction may have been triggered initially by critical comments from US Treasury Secretary Janet Yellen.
Prior to Yellen’s comments, Bitcoin was undergoing a „post-fix consolidation“ and „ranged from $34,000 to $38,000“ with traders „waiting to see which side of the variation would be challenged or broken.
4 hour BTC/USDT chart. Source: TradingView
Steinglass also explained that the next steps of Bitcoin will be determined by the actions of institutional investors. He said:
„US$31,000 was a strong support, so at least not everyone is selling. We will have to wait and see if that support remains or if the institutions continue to accumulate. If they do, the trend is likely to re-establish and continue. If they walk away waiting for further regulatory guidance, their lack of purchasing flow will be deeply felt. ”
Many of the major altcoins have also recovered well from this week’s correction. Polkadot (DOT) rose 7.09% to a daily high of $18, while Chainlink (LINK) posted a double-digit gain and reached the top at $22.31. Tezos (XTZ) also saw an increase in interest, which boosted altcoin by 15% to US$3.36.
The overall market capitalisation of the cryptomino market is now at US$949.8 billion and the Bitcoin dominance rate is 64.4%.