Bitcoin slumped all the way close to $53K in a damaging turn before making a return to the press time price of $55,267. With this, the flagship crypto-asset toned down its losses while the market-wide volatility was ubiquitous.
Weak institutional demand was one of the major contributing factors for the devastating losses. Bitcoin’s fall in Monday was prompted by the weak buying demand from institutions as it established an ATH. During this time, investors were reportedly inclined towards profit-taking rather than accumulation.
It was a result of the flat-to-negative Coinbase premium, which is a major indicator for weakening institutional demand. Nevertheless, the token recovered but failed to cling to psychological support levels.
The Quick Flip: Support-Turned-Resistance-Turned-Support
Besides, the cryptocurrency breached strong support around this $55K area as part of the extended loss briefly before flipping over it within hours. This essentially confirmed that both on-chain and trading volume took a dramatic turn of events but the said level continued to form crucial support for Bitcoin’s price.
Let’s look at some of the key metrics that could reveal Bitcoin’s price action in the days to come.
Growing Participants in Bitcoin ecosystem
Investors have reacted positively to the elevated prices in the market as the number of participants in the network continued to follow an upward trajectory. This was revealed by the blockchain intelligence firm, Glassnode which tweeted,
“The number of new participants in the #BTC network is unprecedented. Over the past weeks, we have seen a large growth of new entities. This is a strong indication that new retail investors have been entering the space.”
Survey Estimates 10% of Stimulus Checks Could Be Channeled To Buy Bitcoin and Stocks
The US President, Joe Biden signed a $1.9 trillion stimulus package into law last week. This made many Americans eligible for $1,400 checks. This brought about inflation and weakening USD fears, which could help the cryptocurrency’s price to go up.
In yet another interesting development, Mizuho Securities’ study estimated that 10% of the roughly $400 billion in funds given directly to the country’s residents could be used to purchase Bitcoin and stocks. After surveying 235 people with a household income under $150,000, the platform found that nearly 40% of them said that they would invest the direct payments into BTC and stocks while 61% asserted that they would choose Bitcoin over equities.
Hence, this provides a hopeful picture for Bitcoin even in the fact of the latest slump.