Bitcoin to Move Out of Consolidation Phase; Indicator Signals Downward Trend Is Losing Strength
- Bitcoin is back to aiming for $40,000, as the digital currency moves upwards this week, but still remains range-bound between $30k and $40k.
According to Bloomberg, the GT Vera Convergence Divergence Indicator, which detects trend fluctuations, is signaling that the bear trend of the cryptocurrency may now be coming to an end.
While Bitcoin is ranging, altcoins and DeFi tokens are taking this as an opportunity to pump hard. The total cryptocurrency market cap has also flown past the $1 trillion mark to $1.15 trillion.
Ether hit a new ATH above $1,765, but it’s DeFi tokens that are the real stars of the show. In 2020 so far, the notable gainers include COVER (8,251%), BAO (4,160%), ALPHA (1,134%), BADGER (1,036%), ROOK (533%), AAVE (466%), and CRV (416%).
However, all these gains can soon move into Bitcoin and take the leading crypto above $42,000 to new highs.
Institutions have also been piling into Bitcoin, with Grayscale buying 643.44 BTC this week. Bitcoin also continues to be moved out of the exchanges. This on-chain analyst, Willy Woo, speculates that could be the result of Michael Saylor holding a conference for companies, which was attended by more than 1,000 executives, to help them make a shift to Bitcoin just like MicroStrategy.
Moreover, as we reported, PayPal that started supporting cryptocurrencies back in October, saw an exceptional response from its users.
“The volume of crypto traded on our platform greatly exceeded our projections,” PayPal CEO Dan Schulman said on the company's fourth-quarter earnings call. “We're excited to build on this early success by allowing customers to use their crypto balance as a funding source. … We hope to launch our first international market in the next several months.”
While PayPal is also investing in its crypto business unit, several crypto funds are being launched as well. Not to mention the retail investors from the traditional markets also see the appeal of the crypto market. So much so, much like CT, now Jim Cramer is suggesting Gamestop take the Bitcoin route. Cramer tweeted,
“Bitcoin! Genius!!! Gamestop needs to be a 5000 store bitcoin palace!!! I cannot believe how brilliant that would be… They can sell stock buy a ton of bitcoin, and just hold on. Call it Bitstop. Or Gamecoin. Wow!”
You can't beat Wall Street using Wall Street. Switch to Bitcoin and watch the powerful become powerless.
— The Chairman (@WSBChairman) February 2, 2021
Moreover, one of the reasons for Bitcoin getting stuck in a consolidation phase, according to Ed Moya, senior market analyst at Oanda Corp, could also be a strengthening dollar ever since the start of the year.
But with the Senate passing the motion to progress Biden’s $1.9 trillion stimulus bill, USD isn’t expected to keep up with this strength for long. This, combined with the money to flow into the market, is further expected to push the prices of assets higher.