Bitcoin Back on a Slide Right After Recording the Highest Monthly Close in History
In another repeat of the last week, today, Bitcoin's price surged as much as $19,950, a mere inches away from hitting that sweet $20,000.
From here, Bitcoin went down hard, going under $18,300 on the back $7.33 billion. At the time of writing, BTC/USD has been trading around $19,280.
November ended with the highest monthly close in history, while December has started on a red note.
As we reported, the market has been expecting bitcoin to drop, if history is any indication, to at least $13,500. Strategists at JPMorgan Chase also said that further declines are still possible.
With technical indicators gotten overbought, a pullback has been called for, although Matt Maley, chief market strategist at Miller Tabak + Co, says, “it is very unlikely that it will be anywhere near as big as the 2018 decline.”
Ki-Young Ju, CEO of the crypto data provider, Crypto Quant, noted that the huge pullback came after the $20k rejection as miners are selling their BTC and whales deposit BTC on the exchanges while no withdrawal is in the scene.
— John Bollinger (@bbands) November 30, 2020
“The Bitcoin correction didn’t last long,” according to Craig Erlam, senior market analyst at Oanda, who said the token might be poised for a new high. Entering “uncharted territory and the psychological boost that would come with a move like this could propel Bitcoin aggressively higher.” He is targeting $20,000 in the short term.
Are Institutional Investors to Blame?
We all have noted how 2020 has been all about institutional investors, which makes it different from the previous bull runs.
It has also been noted that bitcoins’ upwards price movement ever since last October has been mostly happening during US market hours, suggesting that “price rises are being driven by a new wave of institutional buyers who are active during the day and relatively inactive on nights and weekends,” stated Coin Metrics.
The same pattern can be seen with the search for bitcoin on Google and the digital asset-related tweets, which show a lack of retail involvement. Recently, even Bernstein’s Inigo Fraser-Jenkins changed his mind and came out in support of Bitcoin.
Considering this run on $BTC has been institutional driven, and not the retail frenzy we saw in 2017, these metrics make sense.
— Hxro Labs (@RealHxroLabs) December 1, 2020
“While circumstantial, price action really started picking up speed when the U.S. woke up… which could reflect buying pressure from retail-oriented platforms such as Square’s CashApp, Robinhood, and PayPal,” Christopher Bendiksen, head of research at CoinShares told Reuters.
On CME, Leveraged funds are actually record short but likely to be “record long the Grayscale Bitcoin Trust” to collect that premium that is back on the increase reaching 30%.
Overall, these are ‘buy the dip' opportunities before we continue higher and higher.