The price of Bitcoin has been on a downward spiral these past couple of weeks. Falling from its all-time high of $42,000 to as low as $30,000. As of press time, the leading cryptocurrency was trading at $31,476.67.
The plunge can be attributed to profit-taking sentiment among traders. Investors primarily after the price crossed the $38-000-40,000 range on more than two occasions.
However, long-term bullish fundamentals remain in place, giving Bitcoin plenty of hope to continue its upside run. Some analysts are convinced the price will soon retest $40,000 all over again.
One reason is BlackRock’s desire to launch cash-settled Bitcoin futures for two of its funds, the BlackRock Global Allocation Fund and the BlackRock Strategic Income Opportunities Portfolio.
The investment firm made their intentions clear after filing documents with the U.S. Securities and Exchange Commission (SEC). The development does not guarantee a cash-settled Bitcoin futures will come to fruition, but it nonetheless highlights a drastic shift in the tone toward cryptocurrencies.
It was just four years ago that BlackRock CEO Larry Fink referred to Bitcoin as an “index of money laundering.” The company’s latest inclusion of Bitcoin in their SEC filings shows a different take on the cryptocurrency, confirming the cryptocurrency’s growth as a mainstream financial asset.
Another factor that has led analysts to believe another Bitcoin will soon retest $40,000 again is Grayscale’s accumulation of the asset.
The world’s largest cryptocurrency firm recently purchased an additional $600 million worth of Bitcoin after pausing its accumulation spree for over a week. Data shows that the New York firm added 16,244 BTC to its vault, taking the total reserves to more than 630,000 BTC worth nearly $23 billion.
Bitcoin Bullish Fundamentals
Analysts see the Grayscale’s accumulation spree into the new year as a signal of another price rally ahead. “Grayscale bought more than 8,000 Bitcoin,” said Clark Davis, a crypto YouTuber.
“If they did that every day then they would buy 2.9 million BTC this year. There are only 2 million on exchanges. There is no scenario where with this insane demand that the price is not going to go much higher.”
Meanwhile, CryptoQuant CEO Ki Young Ju noted that spot inflows into the cryptocurrency exchanges slowed this week. This signals an extended downside correction in the future.
“$35,684 -> $34,054, and I expect more,” tweeted Mr. Ju. “BTC OG whales are strong if there are no spot inflows.”
Young Ju is confident that Bitcoin will touch $100,000 this year, but projected a bearish outlook for the near term due to a lack of significant buying pressure from Coinbase.
“Whales are depositing $BTC to exchanges. No doubt it’ll hit $100k this year, but in the short-term, if we wouldn’t see any significant buying pressure from @CoinbasePro, I think $BTC would be bearish. Should keep eyes on Coinbase outflow and Coinbase Premium(will launch by tmr)”
Young Ju additionally noted that he can see Bitcoin plummeting to as low as $28,000 in the short term. “$BTC might hit 30k. In the worst case, 28k I think,” he tweeted.