Generally, a fall in the price of an asset is interpreted as a loss for the asset and its investors. However, with the application of fundamental analysis, there could be some anomalies, and this could be the case for Bitcoin.
At the time of this report, Bitcoin is struggling to stay above $ 30,000, despite losing 7.60% in price value in the last 7 days, and almost 4% in daily losses, Bitcoin manages to stay at $ 30,647; But this may not hold for long, as analysts observe. For the bulls to stay on top, the bulls must hold the $ 32,000 price level.
Failure to do this could cause Bitcoin to enter the $ 20,000 + price levels. At $ 20,000, Bitcoin is considered by many to be in a danger zone, but there are important factors that show that Bitcoin at $ 20,000 is even more bullish than Bitcoin above $ 40,000.
Bitcoin may need to correct its steps starting in March
Remember that analysts claimed that Bitcoin may have hit $ 60,000 too quickly. This was a sentiment shared by many traders and analysts.
While Bitcoin was expected to continue the bullish rally from November 2020 into the new year, the surge to $ 60,000 happened so quickly that analysts collectively concluded that buying was bearish and that market volume could not be sustained over time.
Weaker hands should be removed from the market
On the other hand, on-chain data presented by analyst Williams Clemente showed that there was a massive outflow of funds from exchanges.
These addresses were traced back to new accounts, which have been rated as "Weak hands". Assad Tannous, the lead trader at investment firm Assena, explained that Bitcoin hitting $ 100,000 is inevitable, but Bitcoin might have to go as low as $ 20,000 (eliminate weak hands) to start the journey to $ 100,000.
Bitcoin's recovery will take the market by storm
"Clean out the old, let in the new" is a phrase that describes the current state of the Bitcoin market. The relocation of miners from China has helped sink market dependence on China's bulls. As new countries embrace Bitcoin, the volume of trade is expected to flow from multiple religions.
Meanwhile, two notable developments that show that the market is already preparing for a rebound, is the process of accumulating Bitcoin miners over the last month. Whales, on the other hand, have started withdrawing their Bitcoins from exchanges; an activity that analysts consider highly optimistic.