Bitcoin’s price has been rather volatile over the last few weeks. The cryptocurrency’s recent plunge that wiped around $200 billion from the crypto space scared investors, but a key support level may be being held by institutional investors.
The price of bitocin how a new all-time high near $42,000 this month, after surpassing its previous all-time high in mid-December in a bull run that some believed was bolstered by institutional investors adding exposure to the cryptocurrency.
Over the weekend, however, BTC’s price plunged from its new high to around $30,500, and has since recovered to $38,700 at press time. While the price has recovered, investors still believe it may soon fall.
Ki Young Ju, CEO of on-chain analytics firm CryptoQuant, asserted that many institutional investors bought the flagship cryptocurrency above $30,000 , and speculated that if they were indeed behind the bull run, they will be protecting BTC at $30,000.
Even if bitcoin fails to hold the $30,000 level, he speculated it won’t drop below $28,000 which “could be a fresh start for institutional investors.” CryptoQuant’s data analyses institutional investment partly based on Coinbase outflows.
As reported, earlier this year $1.7 billion outflows from Coinbase suggested institutions bought large amounts of BTC even above the $30,000 mark. The outflows could represent institutional investment, according to the CEO, as the funds are moved to “custody-looked-like wallets,” potentially after Coinbase sets up a cold wallet for its customers from over-the-counter deals.
The $30,000 mark has been quoted by other analysts. Daniel Moss, a strategist at DailyFX, wrote this week that the crypto market has been under fire, although over the long-term, both cryptocurrencies could still go upwards, although further losses “look likely in the coming days.” Commenting on BTC’s price performance, he said:
Failing to gain a firm foothold above last week’s close ($38,200) would probably open the door for sellers to drive prices back towards psychological support at $30,000. Clearing that may pave the way for a push back towards former resistance-turned-support at the 2017 high ($19,891).
As CryptoGlobe reported Chris Svorcik, a technical analyst who writes for FXEmpire, was quoted by Business Insider as saying BTC needs to stay above $29,762 – the half-way point between its December 11 low and its January 12 high – to avoid a drop toward the $26,000 mark.
Bitcoin’s price, it’s worth noting, is in uncharted territory. Its previous high was seen in December 2017 near $20,000, which means that above that figure analysts aren’t sure what to expect.
Featured image via Pixabay.