Trading sideways for a while could be healthy for Bitcoin.
After its rise past $40,000, and a correction back to nearly $30,000, Bitcoin (BTC) has rebounded once again. Stalling before jumping back up past highs near $42,000 could be good for the asset, however, according to Brian Krogsgard, a trader and podcaster going by the name LedgerStatus on Twitter.
“Bitcoin’s correction was healthy in a strong bullish environment, mean reverting back to the 20 day moving average,” Krogsgard told Cointelegraph on Thursday. “With a strong bounce now, it is time to see if it will immediately continue upward, or spend longer in prolonged consolidation, which I believe would be healthy.”
Bitcoin barely surpassed $40,000 on Thursday morning before retracing slightly, falling back into the $39,000 range, according to TradingView.com data at time of publication.
Surpassing the $36,000 mark was an important move for the asset, according to comments from CryptoWendyO, a trader and analyst on Twitter. “Unless we reclaim $36,000 I am not ruling out a further drop,” she told Cointelegraph on Jan. 12, before Bitcoin’s recovery past the level. The asset recently pushed past $36,000 with conviction. Bitcoin’s 4-hour price chart now shows a higher low.
Updated commentary from CryptoWendyO shows bullishness on price at present. She told Cointelegraph on Thursday:
“Bitcoin has experienced an amazing rebound at my ~$34,200 support box after that gnarly ~25% drop. I myself am in disbelief however the fundamental of 2020/2021 are different then prior Bitcoin history, currently I believe we will continue to rise and am expecting to flip $42,000 and go on a similar run after we experienced drop on 1/7/2021 from ~$34,200 to ~$28,000 to test ~$48,000.”
Regarding recent price action, Krogsgard sees a correlation to one of the mainstream market’s Bitcoin products. “It appears the GBTC’s closing and re-opening for deposits had a real impact on demand for coins, as the re-opening of their market marked the bottom,” Krogsgard posited. “I believe we’ll continue to see institutional demand on any dips.”
Run by Grayscale, GBTC is essentially the stock form of Bitcoin, with each share backed by a fraction of one Bitcoin. The company put BTC trust investments on hold back in December and reopened them this month.