The sharp rise in price of Bitcoin has stunned traders because it underwent price correction to $30,000 on January 2.
However, in a matter of 24 hours, Bitcoin rallied from $30,300 to a fresh all-time high of $34,778, reflecting a gain of 14%.
As Bitcoin eclipsed $33,000 on January 2, certain high net-worth investors and whales cautioned that a 150 Bitcoin sell off could cause a reversal in the market.
An unidentified Bitcoin trader with nick name “i.am.nomad” tweeted as follows:
a 150 btc market sell would retrace this whole thing. lmao
the higher price goes, the more retail gets prices out, the lower bid support will be.
— i.am.nomad (@IamNomad) January 2, 2021
After he forecast the likelihood of a Bitcoin price correction due to weak order book, the numero uno crypto retraced sharply. Nevertheless, the king of crypto did rebound at a quick pace after the decline, hitting fresh record-high in the last few hours.
Bitcoin’s uptrend was fueled by accumulation by institutions on Coinbase platform and short squeeze on Binance Futures.
Over the last three days, Bitcoin has been trending higher on Coinbase, in comparison to other top cryptocurrency exchnages. This implies that prudent investors on Coinbase platform continue to buy Bitcoin, in spite of premium.
In the meanwhile, several traders on Binance Futures took short position on Bitcoin, likely anticipating Bitcoin to retrace near $30,000. As buyers on Coinbase platform continued to buy, a short squeeze happened. Santiment analysts detailed as follows:
📈 For those expecting a #Bitcoin correction to kick off 2021, the $34,000 #AllTimeHigh achieved 10 mins ago is showing how painful it’s been being a $BTC bear the past 10 months. Avg. trader returns haven’t been this high across the board since June 2019. https://t.co/NADisu58A0 pic.twitter.com/J9ujHfYisP
— Santiment (@santimentfeed) January 3, 2021
The robust momentum driving Bitcoin also pushed Ether over $800, signaling fresh uptrend after consolidation in December. An unnamed crypto trader, referred to as “Mayne” stated January 2 that prevailing rally will take Ether past $800. He tweeted:
$ETH thesis still on track, daily close thru $620 we’d head to $800.
I built a large long position in December and assuming $ETHBTC can hold a higher low, I think it’ll play out nicely.
I should have had more BTC long exposure vs ETH in December, hoping ETH outperform for Jan! pic.twitter.com/uFXGLzrp6m
— Mayne (@Tradermayne) January 2, 2021
Ethereum is also fueled with the news of CME futures exchange aiming to roll out ETH futures in February. On the basis of demand for Bitcoins from prime institutions since the 1Q20, Ether could rally further upwards.
In the meantime, Bitcoin continues to trend upwards, recording fresh highs every day. Considering the overall supply shortage, and institutional and retail buying, the uptrend could likely continue beyond $35,000, which is now perceived as the next psychological resistance.
Of late, six-figure price targets have become quite common. Specifically, the frequency of forecasts has increased soon after Bitcoin started recording new all-time peak.