Bitcoin (BTC) has been on a mission to breach the all-time high (ATH) price of $41,500 it set recently, but corrections have been inevitable. The leading cryptocurrency had been on overdrive thanks to a remarkable spending spree by institutional investors who made record-breaking moves. Nevertheless, profit-taking tendencies by some investors have caused BTC not to surge past the $41,500 as the price is trading at $35,076 at the time of writing.
Alex, a market and crypto analyst, has acknowledged that the $27,000-27,500 is the critical support level, which ought to be watched. He explained:
“$27500-$27000 is the key area. If the price heads back down to 30K, expect 30K to be breached, fall to that area, and bounce back. FAST. All very fast.”
A blast off to $50,000 might be on the horizon
The analyst alluded to the fact that this is the expected scenario if Bitcoin’s trading volume diminishes. He added:
“Range within 30K-40K. Vol comes down. Then either briefly down to 27K to then blast off to 50K, or straight to 50K.”
However, he pointed out that this price retracement might help prompt a bounce to the $50,000 level. A price retracement towards the $27,000 level will see altcoins tagged along by shedding off 35%-50% in intraday trades. Alex believes that the best-case scenario will be buying altcoins compared to Bitcoin.
This analysis commensurates with an observation made by Ki Young Ju, the CEO of on-chain data provider CryptoQuant.com, who noted that many institutional investors bought Bitcoin at the $30-32k level, so they felt obligated to put up a shield. He stated:
“There are many institutional investors who bought BTC at the 30-32k level. The Coinbase outflow on Jan 2nd was a three-year high. Speculative guess, but if these guys are behind this bull-run, they’ll protect the 30k level. Even if we have a dip, it wouldn’t go down below 28k.”
Time will tell how Bitcoin plays out going forward.