Bitcoin price: can BTC hold the $30,000?

Although the Bitcoin price can stabilize for the time being, it has not yet managed to end its sideways phase sustainably.

Increased investments in altcoins are causing the BTC dominance to correct significantly.

Bitcoin (BTC): BTC price continues to trend sideways

  • BTC price: 34,589 USD (previous week: 34,260 USD)
  • Resistances/targets: 35,025 USD, 36,097 USD, 37,910 USD, 39,130 USD, 40,407 USD, 41,970 USD, 43,703 USD, 45,710 USD, 61,694 USD, 77,678 USD
  • Supports: 33,770 USD, 32,237 USD, 29,748 USD, 27,563 USD, 25,752 USD, 24,298 USD, 23,887 USD, 21,892 USD, 19,884 USD

Price analysis Bitcoin (BTC) week 04

Price analysis based on the value pair BTC/USD on Coinbase

The sideways phase of the Bitcoin price, which began in the previous week, has continued for the time being. On the upside, the area around USD 38,000 had a price-limiting effect in the last few trading days. On the downside, the support area around USD 34,000 seems to provide support for the time being. A breakout from this trading range in the coming trading days should lead to a directional decision.

Bullish scenario (Bitcoin price).

The BTC price continued to trend sideways within a USD 4,000 range this trading week. As long as Bitcoin does not fall below USD37,770 on the daily closing price and thus sustainably abandons the EMA20 (red), there are still chances of a rise back towards the upper edge of the range at USD37,910. If the BTC price can promptly rise back above the resistance at 35,025 USD and also recapture the 36,097 USD, the range around 37,910 USD will once again come into the focus of investors. If the bulls manage to dynamically overcome this resistance level as well, the chart picture will brighten noticeably. The BTC price should then again target the area around 39,130 USD.

Only when Bitcoin also breaks through this resistance level dynamically, a renewed approach of 40,407 USD is to be expected. If investors take courage and increasingly bet on a rising BTC price, the probability of a price increase to the all-time high at 41,970 USD increases. If this chart level is subsequently also sustainably overcome, a rise to USD 43,703 is initially to be planned. This is the 461 Fibonacci extension from the daily chart. If the bulls can also break through this resistance level, the next important hurdle awaits at USD 45,710. This price level is taken from the monthly chart. Only when the rally noticeably gains momentum again and the psychological mark of USD 50,000 is overcome, a rise to the mentioned chart targets for 2021 at USD 61,694 and USD 77,678 can be expected in the medium term.

Bearish scenario (bitcoin price).

The Bitcoin price recently failed to recapture the psychological resistance at 40,000 USD. Several times, Bitcoin failed to overcome the resistance at 39,130 USD on the daily close and turned south again and again. Currently, Bitcoin is trading in the area of the EMA20 (red) at 34,500 USD. If the BTC price falls back below the EMA20 (red) on the daily closing and also undercuts the 33,770 USD, a correction extension to the 32,237 USD is likely. If the bears also manage to sustainably undercut this important support, a correction extension to the purple support line at 29,748 USD is to be planned. The area around 30,000 USD currently acts as a strong support, which is why increased resistance from the bulls is to be expected. Only if this support area is significantly undercut, the correction will extend to the selling level at 27,563 USD.

At this chart mark, investors will again try to move the price back towards the 30,000 USD. If, on the other hand, the selling pressure persists and the BTC price falls below the 27,563 USD on the daily closing price, a correction extension in the direction of 25,752 USD is to be planned. If the bulls do not come back here either, a decline to the support area between 23,887 USD and 23,710 USD is conceivable. Here runs the price gap from the future price of the CME as well as the breakout level from December 25. Should this strong support also fail to provide support, the BTC price will set its sights on 21,892. This bearish price scenario increases the probability of a consistency test of the 2017 all-time high at $19,884. For the time being, such a sharp price correction is considered unlikely. Only if the BTC price falls back below USD 29,748 as of the end of the day, the probability of further price consolidations increases.

Grayscale, a record number of investments

Grayscale, a record number of investments in a single day

Grayscale on the day of Friday 15 January raised something like $700 million from its investment assets. This is a record. CEO Michael Sonnenshein explained it on Twitter.

Yesterday, @Grayscale raised north of $700 million into its family of products…momentum from Q4 seems to be picking up speed into the new year.

If you haven’t checked out our 4Q20 report yet:

– Michael Sonnenshein (@Sonnenshein) January 16, 2021

This important figure comes shortly after the release of the latest report on the final quarter of 2020, which also contains an annual balance sheet.

Grayscale had announced its intention to end the year with at least $20 billion in its cryptocurrency Bitcoin Era trusts. The goal succeeded, but Grayscale has not stopped and on 5 January already declared total AUM (assets under management) of $22.8 billion.

This figure has now increased by a further $5 billion and as of 15 January stood at $27.1 billion.

It’s an increase that stands out, not least because Grayscale has had to liquidate the XRP trust due to uncertainties surrounding its lawsuit with the SEC.

Grayscale, Bitcoin the market’s most sought-after asset

An analysis of the latest report from Grayscale reveals some interesting facts about 2020 and the last quarter. During 2020, investments were made in Grayscale’s assets for a total of $5.7 billion, for an average of $109 million per week. Obviously the sovereign fund is Bitcoin, which records $90 million of investment per week.

86% of the investment comes from institutional investors. This percentage rises to 93% if only the last quarter of 2020 is considered. The average weekly investment in the Grayscale Bitcoin Trust also grows to $217 million in Q4 2020.

The report reads:

“Grayscale experienced unprecedented investor demand, with approximately $3.3 billion in inflows. Investments in the Grayscale family of products exceeded $5.7 billion in 2020, more than four times the cumulative inflow of $1.2 billion over the 2013-2019 period.”

Prominent is the growth not only in total AUM but also in the Bitcoin trust, which rose from $1.8 billion to $17.5 billion.

“As we have noted in previous reports, inflows into the Grayscale Bitcoin Trust have continued to grow as a percentage of mined Bitcoins. This metric is significant because miners are known to be the natural sellers in the market, often using their freshly mined Bitcoin to pay for operational expenses. In 4Q20, Bitcoin inflows amounted to about 194% of mined Bitcoins.”

Institutions are here to stay, evidenced not only by the numbers marked in 2020, but also by comparisons with previous years. This is Grayscale’s thinking made explicit in the report:

“In fact, the Grayscale Bitcoin Trust accounted for 87% of all inflows into our product family, the highest percentage since 2Q17, further evidence that institutions are looking at Bitcoin as a backup asset. Average institutional commitment is also growing at a significant pace. The average commitment of institutions was $6.8 million, compared to an average of $2.9 million in 3Q20.”

Finally, the report concludes by pointing out that many investors have approached Grayscale to learn more about Bitcoin. The need to meet this demand for knowledge is a priority in order to continue the adoption of cryptocurrencies, the report concludes.

XRP in Free Fall: A Ripple Damage Record

Ever since the US Securities and Exchange Commission accused Ripple of issuing unregistered securities a few weeks ago, the company has been fighting for damage control. Far more than just reputation is at stake.

60 percent discount in a little more than two weeks: This is the preliminary XRP balance sheet of a likely long-running dispute between Ripple and the Securities and Exchange Commission (SEC). Since the US Securities and Exchange Commission sued Ripple on December 21 for issuing unregistered securities, the bad news for the Californian FinTech – and ultimately for investors too.

The first trick

Almost two weeks ago, the Ripple boardroom received a letter from the SEC informing the company of an impending proceeding. After years of uncertainty, the SEC was finally able to make the decision to classify the ripple currency XRP as a security, i.e. a security token, and not a utility token. The decision coins on the Howey testwho draws a line between currency and security based on various criteria.

Which criterion ultimately made the difference is not entirely clear. According to the SEC, a key condition is “when money is invested in a joint venture with the reasonable expectation of profits from the efforts of others”. This is the case, for example, “if a token gives the holder the right to participate in the company’s earnings or profits or to realize profits from increasing the value of the digital asset”. The not exactly selective integration of XRP and Ripple market capitalization should have strengthened the SEC in its view.

Savory entanglements in the Ripple family

In addition, considerable amounts of XRP are in the private hands of Ripple CEO Brad Garlinghouse and co-founder Chris Larsen. Thus, there is also another SEC criterion: “The issuer owns or controls the ownership of intellectual property rights of the network or digital asset – directly or indirectly”. The fact that Ripple also regularly activates XRP contingents and transfers parts of them back to escrow accounts feeds the suspicion that “the publisher [creates] a market for his asset and [determines] the number of tokens created”.

Thus, in the opinion of the authority, XRP could ultimately be a security. In this case, Ripple did not provide potential investors with sufficient information (keyword: securities prospectus) to violate the applicable US federal securities laws – and, in the opinion of the SEC, was ultimately guilty of issuing unregistered securities.

The Bitcoin community donated more than $1 million to the Dave Portnoy Charitable Foundation

Dave Portnoy, the creator of sports media platform Barstool Sports, launched a charitable foundation to support small businesses in the U.S. in the face of a coronavirus pandemic. In just a few days, he raised more than $1 million from cryptocurrency supporters.

Portnoy announced the launch of The Barstool Fund on Dec. 17, but until Dec. 24, donations could only be made in fiat.

Dave Portnoy actively promotes the initiative on Twitter, one of the most popular communication platforms for cryptocurrency followers.

On Christmas Eve, the foundation began accepting bitcoin, and in just a few days, donations from the bitcoin community, including fiat transfers, topped $1 million. Among those who supported the initiative were Gemini exchange founders the Winklevoss brothers and Morgan Creek partner Anthony Pompliano.

On Dec. 25, Portnoy reported that of the $750,000 that cryptocurrency supporters had donated by then, $100,000 had come in bitcoin.

He also called on the bitcoin community to more actively support the initiative, and his words were heard. In the next 36 hours, cryptocurrency proceeds topped $500,000, Alex Wilson, co-founder of tech support platform The Giving Block, told Decrypt.

“It’s a great initiative, and it’s hard to find a better cause for charity. Small businesses are the backbone of the whole country, trying to keep the American dream alive. But at a time when they needed support the most, politicians abandoned them,” said Anthony Pompliano.

Since launching the initiative, the foundation has raised more than $7.1 million, providing financial assistance to many struggling businesses across the country, including caterers, dry cleaners, beauty salons and more.

Recall that earlier this year Dave Portnoy invested more than $1 million in bitcoin and several altcoins, but suffered losses on the market drawdown and excluded cryptocurrencies from his portfolio.