BTC recent reversal dragged most altcoins and the second most popular crypto Ethereum fell on Sunday as well.
Bitcoin (BTC) price has surpassed expectancy over the last days. The price started to recover on Monday with a considerable rally setting a new all-time high at the end of the week — reaching a market cap as high as $24,273 on Sunday.
Now the price is traded at the current level of $22,700, suggesting there’s still buying demand despite falling below 23K. Likewise, many investors feared a price correction since the beginning of last week — it is now estimated that it could fall to the support of 20K, which most traders consider a valid correction for a future price increase.
Source: tradingview
This price drop is driven by several factors that injected fear into the cryptocurrency market. Among them is the slight collapse of US futures in pre-market hours. Approximately 2.6%. Similarly, concerns about new spikes and quarantines in the United Kingdom affected the price of Bitcoin and, consequently, of altcoins.
Bitcoin (BTC) Price Affected amid European Markets Facing Strong Reversals
Even though the rally was losing steam by Friday, markets – especially in Europe, faced a sharp reversal on Monday morning. This is due to the concerns about the new strain of coronavirus emerging in the United Kingdom. It shouldn’t come as a surprise that the travel industry stocks were negatively affected, as Lufthansa fell above 6% lower, and AirFrance KLM fell beyond 7%.
Despite this, most cryptos kept their positive rally, and Bitcoin managed to stay above the 22K support. BTC recent reversal dragged most altcoins as well, and the second most popular crypto Ethereum fell on Sunday. But the price is still on the rise whatsoever.
Institutional Investors Racking Up Bitcoin
Renowned millionaires and financial institutions have played an important role when it comes to the price of Bitcoin. In 2017, retail investors and traders were the first cause of BTC’s huge surge to over $20K.
For 2020, the positive rally for Bitcoin to establish a new record was more stable, but with a massive purchase of BTC by institutional investors and famous millionaires who seem to adopt BTC as a better store of funds to gold compared to the traditional use of the coins.
This prompted fear of liquidity problems due to the massive acquisition of crypto-assets by firms like Grayscale and MicroStrategy. By now, Grayscale holds in its portfolio around $15.5 billion worth of cryptocurrencies — while MicroStrategy holds 40,824 Bitcoins, or $929M.
According to Chainalysis’s Chief Economist, Philip Gradwell, Institutional Investors in the US are driving most of these massive institutional calls on cryptocurrencies to put aside the traditional fiat and to push more buying demand globally.
“The role of institutional investors is becoming ever clearer in the data. Demand is being driven by North American investors on fiat exchanges, with greater demand from institutional buyers,” stated Philip Gradwell in a note to his clients.
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I’m a finance journalist and copywriter with a keen interest in the fintech field. I have keen on blockchain technology and cryptocurrency and I believe it can reshape the way we see money and financial freedom.
