This week sent cryptocurrencies trading in the red after Bitcoin led the market crash, falling 22% from the local high of nearly $60,000 to the swing low at $46,000. The cryptocurrency markets saw an influx of volatility, with Elon Musk steering the wheel. Since the weekend, Dogecoin has dumped and pumped, along with other dog-themed tokens that have gained traction over the past week. Amid all the volatile price action, more institutions are coming to crypto – even those on Wall Street.
Let’s dive in.
Bitcoin consolidates after posting ATH
One of the most significant factors for Bitcoin price decline over the past few days was Elon Musk announcing that he will no longer accept BTC for Tesla car payments. He cited environmental concerns of Bitcoin mining and transactions as the main reason. However, he also decided to accept Dogecoin for an upcoming SpaceX rocket launch in 2022. This is highly contradicting since DOGE runs on a proof-of-work consensus mechanism, just like the leading cryptocurrency.
While speculators in the market are losing faith in Bitcoin, this has created many buying opportunities for investors. Bitcoin’s 30-day MVRV ratio shows the coin’s average profit and loss percentage is indicating that BTC is currently oversold, adding fuel for the currency’s subsequent rally.
Examining Bitcoin’s daily chart, the cryptocurrency is trading within an ascending parallel channel, which can be seen when connecting the local highs as the upper resistance and the local lows as the lower support level. Bitcoin is currently trading just slightly above the support level.
However, any daily candle that completely breaches and plunges lower than the current support could see BTC dipping lower, heading to January highs at around $40,000.
The crucial support and resistance levels could give insight into where the coin could be headed next and price levels to set stop-losses and take-profit orders. For example, a support level could be a good indicator for setting stop-losses since the cryptocurrency could see further losses once it fails to hold the support. Vice versa, to secure gains in the volatile market, resistance levels could be indicators for near-term price action if bullish momentum is confirmed.
However, watching the market 24/7 is just not possible. Therefore it would be essential to use an automated crypto trading platform like CoinPanel.
CoinPanel provides you with more options for orders than on a regular crypto exchange and even allows you to set stop-losses and take-profit orders simultaneously without having to choose one over the other – unlike on exchanges. In addition, CoinPanel’s Positions feature will enable you to keep track of your profits and losses so far on each open position, making trading decisions and strategies even easier.
Institutions continue to step into the market
Palantir, founded by pro-Bitcoin Peter Thiel, has recently announced that the company has accepted Bitcoin as payment. Further, the firm may consider adding BTC to its balance sheet and hold it as a store of value instead of cash.
Remember, the supply of Bitcoin is finite, and institutions are continuing to scoop up more of the cryptocurrency, potentially leading to higher prices.
On Wall Street, century-old investment bank Cowen decided to launch custody services for digital assets for institutional investors. The New York-based firm would become the first bank on Wall Street to deal with cryptocurrencies directly. Other Wall Street giants like Morgan Stanley and Goldman Sachs have stepped into the market but are only dealing with products that give access to crypto’s price action, not the underlying asset itself.
Once again, MicroStrategy has purchased additional Bitcoin, this time adding $15 million to its bag.
Dogecoin price chases after Elon Musk
Elon Musk has done more than move the Bitcoin market, but also Dogecoin price. Following the billionaire’s appearance on “Saturday Night Live,” DOGE crashed while other canine-themed cryptocurrencies gained traction and surged. The dog-themed tokens, including SHIB, AKITA, Dogelon Mars, were propelled by the influx of popularity driven from social media platforms. However, the hype did not last long.
Since the creators of these dog tokens gave Ethereum co-creator Vitalik Buterin a large portion of the liquidity, Buterin sold these tokens and donated the proceeds to charity. The dog coins instantly crashed after. In just three days, SHIB price fell by over 68% after the hype from listing on prominent crypto exchanges, including Binance.
Driven by Musk once again, Dogecoin managed to turn things around and surged by over 60% in the past 24 hours. The bullish momentum was driven by Musk’s announcement saying that the entrepreneur is working with Dogecoin developers to improve system transaction efficiency. He added that it would be “potentially promising.”