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Markets Report: Bitcoin puts in $54K low but strong holders keep demand flowing

The week’s downturn stays in force as analysts disagree over its root cause but buyers are far from in short supply

Bitcoin stayed lower on March 16 as the week’s comedown from all-time highs accelerated overnight.

Data from price trackers including CoinMarketCap and Tradingview showed BTC/USD hitting new local lows under $54,000 early on Tuesday.

Whales cause a dispute over rumored sell-off

The move compounds an already bearish turn in Bitcoin markets which followed new all-time highs of $61,700 during the weekend.

As with the previous record at $58,300, optimism came head-to-head with large-volume sellers and negative press, this once again centering on rumors that India will seek to ban cryptocurrency.

The sell-off narrative also became a source of controversy in itself after rival analysts disputed whether or not a large inflow of funds to exchange Gemini was a professional investor or an internal transaction.

“Miners sold 112,205 #Bitcoin on the first week of 2021. 18,700 BTC per day, all while the price was rising from $29k to $40k,” commentator Lex Moskovski responded to the situation on Monday. 

“Yet, we are arguing about if that 18k inflow today really happened. As if it matters.”

Moskowski added that conspicuous buyers had used the price dip to add to their positions, underscoring continued appetite for BTC throughout the 2021 bull run. Citing Glassnode data, he tweeted:

“Strong holders have increased their buying volume the last several days. Their positions change has never turned negative for almost 3 months. They have added ~10m (bitcoins).”

Bitcoin’s illiquid supply only increased into all-time price highs. Source: Lex Moskovski/ Twitter

Sideways prognosis

In terms of short-term price action, Bitcoin returned to its previous trading zone thanks to the dip, once again looking at $50,000 as a significant focus and stronger support at $46,000 shoring up the floor.

For popular trader Michaël van de Poppe, those levels were still less likely to see a test, with the possibility of resuming the upwards grind still firmly in the cards.

“Bitcoin is looking at a new range construction here. $58K lost and therefore looked at support at either $53 or $55K. Found at $53K,” he told Twitter followers on the day.

“Looking for some sideways action before a new direction will be decided (sub $53K or above $58K).”

At press time, BTC/USD was lingering at around $55,000.

BTC/USD continues grinding downhill from all-time highs. Source: Tradingview

With the similarities between $61,700 and $58,300 preoccupying hodlers, others noted that despite volatility, overall price performance was considerably more favorable than during previous bull runs to significant levels, specifically 2017 and $20,000.

“Bitcoin has closed 15 days above $50,000. In 2017 it didn’t close 1 single day above $20,000,” Danny Scott, CEO of U.K. exchange Coin Corner, summarized. 

“Not even close to peak.”

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Anthony Bevan is a journalist focusing on disruptive finance and cryptocurrency, along with the changing face of the market as Bitcoin gains mainstream adoption. Journalists covering cryptocurrency for Modern Consensus May hold positions in some of the currencies they write about.