Bitcoin broke many crucial support levels and ended up trading close to $28,500, from where it began correcting losses. On the upside, the $30,800 and $31,000 resistance levels are significant for continuous correction. Failure to break resistance at the aforementioned levels could open room for more losses around the nearest support levels of $28,800 and $25,800.
At press time, Bitcoin bulls are facing rejection as the $31,700 price mark continues to drop, alongside daily losses which are now totaling 11% at the time of this report. Market sentiments are mixed and analysts have continued to weigh in on the bear market, which they already term necessary for an unmatched bullish takeover.
On-chain indicators like the SOPR (spent output profit ratio), a signal which accesses long-term investors’ behavior is declining as less Bitcoin is being moved for extreme profits. This signal which had previously surged by 13% in December, indicating that a complete 100% upsurge could send Bitcoin to a never-before-seen price of $328,000 may not be in its most bullish state, yet investor and CTO of Glassnode Analytics reveals his readiness to buy the dip, perhaps in hopes that a correction in price is just around the corner.
Recent #Bitcoin price action is not surprising, given an overextended SOPR (see quoted thread).
SOPR is nicely declining towards 1, less $BTC is being moved on-chain at extreme profits.
I am slowly getting ready to #BTFD.
Chart: https://t.co/UadRZkxRB7 https://t.co/Ef4C1rB2ho pic.twitter.com/Rtc1QgEote
— Rafael Schultze-Kraft (@n3ocortex) January 21, 2021
Meanwhile, speculations that the Bitcoin blockchain was disrupted and Bitcoins were stolen has been making rounds on crypto-twitter. This kind of Bitcoin theft known as “double spending’ happens when a copy of the currency transaction is sent by the Bitcoin thief to prove legitimacy or the entire transaction is cleared altogether. These were quickly debunked by analysts who noted that a double-spending did not trigger the bear market, adding that there was no double-spending at all.
Furthermore, the historic pattern of Bitcoin losing 80% of its value after an all-time-high has been causing FOMO in the community. However, it is important to note that the 80% downward price correction usually happens after a 20x upsurge in current price.
CNBC et al see the price down 20%+ and think ~”bitcoin has done several 80%+ corrections. Ut oh.”
But each one of the 80% corrections was after going *at least* 20x from the prior all-time-high.
So far this time, the Jan 7 high of ~$42k was 2.14x the prior multi-year ATH.
— Dan McArdle (@robustus) January 21, 2021
Should Bitcoin follow this pattern, a 77.86% price increase (over $50,000) must be recorded before the major price decline happens. Overall, analysts hint that buying the dip could potentially pay off, seeing as whales are also awaiting a correction in the near term. Alternatively, others look to altcoins for shelter. Although altcoins attained gains from last weekend, these gains were not sustained over the week.
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