Bitcoin price rallies to $42,000 on strong spot trading volumes. Will altcoins follow?
Bitcoin (BTC) slipped below the $40,000 support on Jan. 22, but bears could not sustain the lower levels. The price has risen above $40,000 again, but some analysts expect the bleeding to continue. Chris Burniske, partner at crypto venture capital firm Placeholder, said in a post on X (formerly Twitter) that he would not be surprised to see Bitcoin drop to mid-to-high 20,000 levels before a bottom is made.
One of the major reasons for Bitcoin’s recent fall has been the massive liquidations in the Grayscale Bitcoin Trust (GBTC). However, JPMorgan analysts said in a Jan. 25 market report that the bulk of the profit taking in GBTC has “happened already,” meaning “most of the downward pressure on Bitcoin from that channel should be largely behind us.”
Every bull market has its share of corrections, which helps shake out the weak hands and allow the stronger hands to buy at lower levels. During a correction, waiting for a support level to be established before buying is generally a good strategy.