Bitcoin hits a wall at $28,000 after bank-turmoil rally fizzles

Bitcoin has been on an impressive rally in the first quarter of 2021, reaching a key trading point of $28,000. However, this advance has stalled, according to analysts. Over the last three weeks of trading, Bitcoin has been trading within 15 percent of a key trendline, its average price over the past 30 days. This has led some people to call Bitcoin’s current trading pattern “range-bound.”

Alex Coffey, senior trading strategist at TD Ameritrade, has observed that the cryptocurrency is “chopping around that level right now” and “sort of just drifting”. The initial rally came after the fallout of several US lenders last month, leading investors to resurface narratives around the cryptocurrency being a hedge against inflation and a safe haven amid turmoil at traditional banking institutions.

Bitcoin hits a wall at $28,000 after bank-turmoil rally fizzles

Aya Kantorovich, former head of institutional coverage at FalconX, believes that the recent cryptocurrency price increase is not due to any new users, but rather to “retail or already engaged crypto traders or institutions.” She notes that the initial reaction will be either of these groups, and not new users.

Institutional investors sought safety elsewhere in products such as exchange-traded funds (ETFs) or mutual funds, leaving crypto to inspire little new buy-in. There is not “a narrative for any price action currently”, Kantorovich added. In the meantime, speculators have turned their attention to other tokens, such as Bitcoin Cash, which surged as much as 30% after Twitter featured the digital currency on the home button to the site.

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