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BTC Dips Below $60K: Short Correction Before Heading For $75,000

By AMarkets CompanyCryptocurrencyOct 28, 2021 11:57
BTC Dips Below $60K: Short Correction Before Heading For $75,000
By AMarkets Company   |  Oct 28, 2021 11:57
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The cryptocurrency market is back in the red. After updating the all-time high amid the much anticipated first Bitcoin ETF debut on the New York Stock Exchange, bitcoin started to correct, ending up below the $60,000 support. It is worth noting that once the BTC rate tested $58,000, total liquidations of long crypto positions exceeded $700 million.

Is there a fundamental reason for this collapse? No, the current downward momentum can be explained only by technical factors. It's worth recalling that any trend movement in the financial market is a constant struggle between buyers and sellers when the power swings back and forth. Recently, the BTC rate has added more than 30% and reached new highs, so there is nothing abnormal that bears were also given the opportunity to recoup and buyers - to lock in their profits after reaching new historical maximums.

Despite this recent drop below the $ 60,000 area, the BTC maintains its overall upward trajectory. The current fundamental background also says in favour of further growth. Let's recall that last week, bitcoin's strengthening was driven by the approval of three bitcoin futures ETFs at once by the US Securities and Exchange Commission (SEC). Last Tuesday, the ProShares Bitcoin Strategy ETF (NYSE:BITO) debuted on the New York Stock Exchange. On the very first day, the trading volume exceeded $1 billion. On Friday, the Valkyrie Bitcoin Strategy ETF (NASDAQ:BTF) fund began trading on the Nasdaq exchange. However, it failed to repeat the success of the ProShares Bitcoin Strategy ETF - on the first day, the fund's trading volume amounted to about $ 80 million. These contracts are highly volatile, which suggests that there's still significant interest in Bitcoin. Investors are ready to keep investing in BTC as it's being gradually legalized on stock exchanges.

The declining supply of bitcoins on crypto exchanges, which reached its lowest level since 2017, also supports the expectations of the BTC's resumed appreciation. The decrease in supply indicates that crypto owners are transferring bitcoins to cold wallets, believing in the continuation of the bullish rally. The bitcoin ecosystem is still dominated by big players who currently control 8.5 million bitcoins or 45.1% of the total supply. The lion's share of this volume has now been withdrawn from the exchanges.

According to JPMorgan Chase (NYSE:JPM) experts, inflation fears in most of the world's economies will keep driving the digital currency to record highs. Given that inflation concerns will remain relevant until the end of this year, each Bitcoin drawdown will be redeemed by those traders who see investing in cryptocurrencies as the best protection against the depreciation of fiat money. It is worth noting that bitcoin has long supplanted gold as the preferred hedge, which is confirmed by the BTC and XAU price dynamics in recent months: bitcoin is rising while gold prices keep falling. That being said, Bitcoin could still rally, targeting a $75,000 mark.

BTC Dips Below $60K: Short Correction Before Heading For $75,000

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BTC Dips Below $60K: Short Correction Before Heading For $75,000

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