Bitcoin (BTC) price may extend its dip to $24,000. Here’s how

Written by: Michael Harris
January 27, 2021
  • Inflows into crypto funds and products reached a new high of $1.31 billion last week
  • Bitcoin’s price action is now testing a nearby horizontal support at $30,700
  • The measured target of the symmetrical triangle chart pattern comes at $24,100

Bitcoin (BTC) price is trading in a correction mode after hitting the new all-time highs at $42,000.

Fundamental analysis: Price conscious investors

Inflows into crypto funds and products reached a new high of $1.31 billion last week as investors took advantage of the price dip in Bitcoin and other cryptocurrencies, according to CoinShares. 

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Around 97% of inflows went to Bitcoin, while Ethereum reported inflows of $34 million last week.

The number of total assets under management (AUM) fell to $29.7 billion as of January 22, after touching an all-time high of $34.4 billion on January 8 and compared to AUM of only $2 billion at the end of 2019. 

The largest crypto asset manager in the world Grayscale reported AUM of $24 billion last week, compared to  $28.2 billion posted on Jan. 8. Moreover, the second-largest digital asset fund CoinShares reported AUM of $2.9 billion in the latest week, compared to $3.4 billion on Jan. 8.

“We believe investors have been very price conscious this year due to the speed at which prices in bitcoin achieved new highs,” said James Butterfill, investment strategist at CoinShares.

“The recent price weakness, prompted by recent comments from Secretary of the U.S. Treasury Janet Yellen and the unfounded concerns of a double spend, now look to have been a buying opportunity with inflows breaking all-time weekly inflows,” Butterfill added.

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Technical analysis: The pullback may extend

Bitcoin price dropped further to $28,800 on Friday, after BTC buyers forced a trip to a new all-time high of $42,000 on January 08. The price action is now testing a nearby horizontal support at $30,700, with a break of this trend line likely to accelerate the correction. 

BTC/USD 4h chart (TradingView)

Bitcoin broke out of the symmetrical triangle on January 20 to activate the pattern. The measured target of this chart pattern comes at $24,100. Moreover, the price action trades below both the 100-DMA and 200-DMA. Overall, the short-term bias is tilted to the downside. 

Summary

Crypto inflows touched a new high of $1.31 billion as investors rushed to buy the price dip in Bitcoin and other cryptocurrencies. In the meantime, Bitcoin looks ready to correct further lower to low $24,000s.