After setting a new all-time high around USD 42,000, a sharp downside correction began with the bitcoin price. BTC dropped over USD 5,000 and it broke the support rate of USD 38,000 and USD 36,500. Also below the USD 35,000 support zone, there was an increase and the price traded near the USD 32,500 main support zone.
It stayed just between USD 32,500 and USD 33,000 in bids. Bitcoin is presently recovering and trading higher than USD 35,000. The initial resistance is near the level of USD 36,500. Near the USD 38,000 mark, the key resistance is now forming.
As bitcoinist.com reported, the unpredictable drop left analysts of Bitcoin wondering the next price direction. Scott Minerd, who in the future forecast BTC/USD at $400,000, said the pair’s continuing upward trend in the short-term seems unsustainable, referring to its overextended-ness that could crash its lower price. “The target technical upside of $35,000 has been exceeded,” the Guggenheim Partners’ managing partner added. “Time to take some money off the table.”
Meanwhile, prominent Bitcoin bull Vijay Boyapati came to the defense of the current price correction of the cryptocurrency, remembering that each of its volatile bull runs has historically seen 30-40 percent downside movements. The analyst noted that the upside mood of Bitcoin will return as soon as it finds a level of session support.
As previously mentioned by Bitcoinist, the forecast of Mr. Boyapati may come true as Bitcoin goes in a week to see the unveiling of a new stimulus package. On Friday, US President-elect Joe Biden told reporters that after taking the oath, one of his goals would be to spend trillions of dollars on improving the US economy.
Bitcoin’s valuation thesis favours fiscal deficits. When the US Congress passed two stimulus bills with a total size of $ 3.2 trillion, the cryptocurrency soared by more than 900 percent. Which reduced the appeal of the US dollar and sent investors in favor of the top cryptocurrency searching for protection in riskier assets.