After reaching a new All-Time-High (ATH) of around $41,900 last week, the Bitcoin price has just suffered a steep drop of 26.6% this Monday. More than $11.000 have vanished from its value quickly during the last 24h. Luckily, it seems on its way to recovering, and now it’s at $32,000+ per unit again.
This price drop might be due to a massive sell-off by miners. According to the analytics firm CryptoQuant, their Miner Position Index reached 2.2 last Sunday; which means the higher rate since July 2019. In this statistic, when the rate is above 2 points, the miners are selling their cryptos to take their profits in other currencies.
And they’re not the only ones. As indicated by data from several South Korean exchanges, the whales were selling large amounts of Bitcoin as well. Around $200m in BTC were moved throughout these exchanges last week. Additionally, according to the analysts at Decentrader, “about 5% of 1 Year Hodl’s coins have been dumped” to date. To sum it up: everyone is taking their profits.
Meanwhile, the U.S. Dollar Index ( USDX, DXY, DX — a measure of the value of the USD relative to a basket of foreign currencies) is behaving in an inverse correlation with Bitcoin price and cryptocurrencies in general. The rate had only been going down since March, but it bounced by 5.7%+ since the last week.
Will Bitcoin price recover?
This recent correction might be temporary, indeed. Bitcoin is already showing signs of recovery, and some big plans and bright predictions are surrounding it. For example, the Chinese sports lottery firm 500.com is planning to invest around $14.4m to buy Bitcoin mining machines.
Moreover, the trading platform eToro stated recently they’ve seen an “unprecedented demand” to access their services, for which they have been forced to increase the minimum deposit amount for new users to $1,000. That could mean a nice inflow to Bitcoin and cryptos later.
On the other hand, Michael Sonnenshein, the new CEO of Grayscale Investments, affirmed that it might be some institutional interest in putting the pension funds and endowments into Bitcoin and cryptos this year. In the same vein, the founder and CEO of the international MercadoLibre, Marcos Galperin, stated that Bitcoin is a better store of value than gold.
Now, according to the perspectives for 2021 by BayernLB or Bayerische Landesbank, the seventh-largest financial institution in Germany; Bitcoin price can reach at least $60k by mid-year. It could even reach 250,000 USD per unit soon after if everything goes well. Beyond this 2021, there are even more optimistic predictions. So, at least in the long term, we can wait a lot more from Bitcoin and cryptocurrencies.
Featured Image by Roy Buri from Pixabay
Originally published at https://blog.alfa.cash on January 11, 2021.