Bitcoin price is still falling due to the rejection of new highs this weekend and efforts to maintain support at previous resistance levels. On the way down the buying pressure was far less than on the way up. A leading quant cryptocurrency analyst warns that fresh USD capital will be required for new highs.
Here’s what it might take for the leading cryptocurrency by market cap to do a full recovery and get past $ 60,000 on key fundamentals.
New USD inflows to identify exchanges necessary for further bull market momentum
Bitcoin has been in a sustained uptrend since Black Thursday last year when markets worldwide collapsed due to the pandemic outbreak.
The past year has been spent months with the most dominant spot exchange in the United States, Coinbase, which had a significant price premium over other stable coin-denominated exchanges.
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Cryptocurrency exchanges like Coinbase offer investors direct entry into Bitcoin, Ethereum, and dozens of altcoins. When cash flows into the crypto asset class, the premium will be displayed. When the money bleeds back, the premium plummets and may even tip in favor of stable coin trading pairs.
I think $ BTC would take some time to build another leg in terms of supply / demand.
1 / Too many $ BTC stocks in USD compared to stable coin stocks on cash exchanges.
2 / The BTC market cap is too big to take another step up using only the stable market cap for coins. pic.twitter.com/daXPaKU3U1
– Ki Young Ju (@ki_young_ju) March 17, 2021
According to Crypto Quant CEO and fundamental analyst Ki Young Ju, spot inflows must return to bring a new supply of USD to market before new highs are hit. Right now there are simply not enough stable Bitcoin inflows to maintain the current Bitcoin market capitalization and a “reset” could come.
Fundamentals suggest that Bitcoin FOMO is wearing off, which could mean for new highs
Fundamentals suggest lower spot inflows at Coinbase, despite thousands of coins leaving the platform every week.
Until more money flows in, the leading cryptocurrency by market capitalization runs the risk of losing a key uptrend line (see figure below).
In the absence of significant spot inflows, Bitcoin could lose this trendline Source: BTCUSD on TradingView.com
The loss of the trendline would send Bitcoin back to prices around $ 46,000, where retesting previous support would result in resistance. The deeper sell-off could question whether a double top with a downside target of around $ 32,000 will form based on the measurement rule.
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The full correction – if it stops there – would be a full price correction of almost 50%. At some point along the way, the price per BTC should get attractive enough for spot inflows to return. The only questions that remain open are when and at what price.
Any lower and leading cryptocurrency by market capitalization could impact a different bear market and a full 80 percent retracement from highs.
Featured image from deposit photos, charts from TradingView.com