Bitcoin avoided a fresh drop on January 28 as traders hoped that the ongoing stocks frenzy would soon produce a return to the bull market.
Redditors become equity kings
In what is becoming an increasingly unusual week for the financial markets in general, Bitcoin took a back seat as commentators continued to focus on developments with U.S. stocks GameStop ($GME), AMC ($AMC) and others.
As Modern Consensus reported, $GME shot onto the mainstream radar after a Reddit subreddit, r/Wallstreetbets, collectively boosted its price by 1,700% in just over two weeks. The event, which is being viewed as an uprising of retail investors against institutions such as hedge funds, even led to public warnings from NASDAQ that it would forcibly prevent traders from continuing to exchange suspect stocks.
With the subreddit still operational on Thursday after briefly becoming private access only, Bitcoin proponents were hoping that traders would use their gains to fuel a fresh rise in BTC/USD.
On the day, meme-based altcoin Dogecoin already appeared to be benefiting from such a process, jumping 85% in hours as daily trading volume surged by over 810%. By comparison, Bitcoin was looking like a decidedly unprofitable bet.
“WallStreetBets is one step away from discovering Bitcoin,” popular Twitter account Documenting Bitcoin forecast.
Gemini exchange co-founder Tyler Winklevoss described Bitcoin price action as “boring.”
BTC/USD bides its time on Thursday. Source: TradingView
A tall order for a Bitcoin bull market
On the spot markets, options for short-term upside for Bitcoin were still decidedly limited. In his latest YouTube update, trader Michaël van de Poppe said that $34,000 would need to reappear to confirm a bullish continuation. At the same time, $30,000 must hold as support.
The overall theme centered on historical patterns of behavior in which Bitcoin corrects in February.
“If this does not happen… and we do not break above the range high, then the likelihood of consolidating further downwards in February towards the 21-week MA is significant,” he summarized.
Van de Poppe was referencing another mid-term theory which calls for the Bitcoin spot price to ‘kiss’ the 21-week moving average price, with the two meeting in the middle of their range at around $25,000.
“Back in 2016-2017 there were times when Bitcoin hit a local high, followed by a pullback where it took several weeks to a couple months for price to reclaim the high and move higher up,” fellow trader Josh Rager tweeted.
“Be patient here – Bitcoin will hit another high, but it may take weeks to get there.”
Among major altcoins in the meantime, Chainlink was outperforming on the day with 12% gains, as altcoins broadly rallied after falling in line with Bitcoin’s dive below $30,000. Largest altcoin Ether limited further losses to climb 4% above $1,300.