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Bitcoin price decline; correction or new trend

Last week's drop in the price of bitcoin to $19,000 led to losses for many traders. Some speculators were talking about losses in the millions of dollars. But this affected only those whose work used borrowed funds. On January 8, the rate of bitcoin updated its all-time high, breaking through the mark of $41,000, but by the 11th there was a significant correction. So what to expect from the quotations of the first cryptocurrency?

The role of institutional investors

Over the past year, the number of so-called "whales" - bitcoin addresses with more than 1,000 coins on their balance sheet - has increased by a quarter. At the same time, in the last week, their increase was more than two hundred addresses. From this we can draw a conclusion - the majority of large investments were made in the price range of $30,000 - $32,000. Perhaps this was one of the reasons for the sharp jump in bitcoin on the chart, due to the emergence of a large demand by big players.

If we look back in the past, it becomes noticeable that during the previous bull trends the number of "whales" decreased by a quarter. And everything happened in the periods of price, local maximum of bitcoin rate on the exchange. In such a way institutionalists fixed their profit. But you can also make a profit by investing in crypto mining hosting in UAE.

But the number of addresses with balance less than 0.01 coin, on the contrary, significantly decreased for the last month. That is, private investors fixed their profits and closed their positions, fearing a repeat of 2017. 

Thus, it is possible to speak about fundamental conditions of price support at the level not lower than $30,000 - institutional investors will not allow its decrease below this level. There may be local drops in bitcoin exchange rates to $28,000, but there are no prerequisites to fix at this level, or to fall below this mark in the near future. And the founder of cryptocurrency bank Galaxy Digital Mike Novogratz is sure - big investors, who discovered all the possibilities of cryptocurrencies only a year ago, have not yet satisfied their needs. That is, we can talk about steady demand for the foreseeable future.

Chinese New Year and industrial miners

Chinese miners began to actively sell mined bitcoins, thus fixing the profit. The price has made it profitable to use even outdated equipment. Many turned on old equipment that had been turned off during the fall to the $3,000 level. Also bitcoin sales in the Celestial Empire are not only related to the rate on online exchanges, but also the upcoming New Year's holidays in China.

During the long vacations, the supply of new coins on the market historically decreases. During this period, the bitcoin chart usually goes into a sideways trend. A few days before the holidays, on the other hand, the price decreases. The desire of miners to make a profit "for gifts" has been traced for the last three years. That is, we should expect an increase in supply on the market and reaching a local low before February 12, with a slight correction in the next week. This will be a great time for those who would like to transfer some of their assets into cryptocurrency.

What the charts say

Stack Funds in its report talks about the bitcoin rate correction as a necessary situation before a further rise. At the same time, the company's experts believe a further price target near the $86,000 mark. The submitted document says that the market has just moved into the stage of the so-called "belief". In this case, the next stage is the "euphoria", where further growth will occur. Here you can analyze the various indicators of the online chart of bitcoin exchanges.

Everything says about the need to sell coins. And in the case of active trading it has its reasons. But in the case of long-term investments, such a decision does not seem to be the best. This is indicated by the fundamental signs described earlier.

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