After a sharp pullback at the end of last week, Bitcoin seems to be on the road to recovery.
The pullback began on Thursday, March 28th. The day prior, Bitcoin peaked just over $57K; by the end of the day on Thursday, however, the price of Bitcoin had fallen to nearly $51K. A number of analysts pointed out that the correction was particularly surprising because of the record amount of options expiry that was due on Friday, March 29th.
The price correction caused many analysts to question whether or not BTC was at the beginning of a larger bear cycle. However, after BTC’s price drop bottomed out last Thursday, Bitcoin has been on a path of steady gains. The rise appears to have been bolstered by news this week of both Visa and Paypal announcing plans to enmesh themselves further into the crypto world.
Now, the big question on everyone’s mind is what will happen in the coming month. Will Bitcoin manage to recapture $60K and beyond? Or is another pullback in the cards before Bitcoin can regain steady ground?
Bitcoin has been bolstered by positive news throughout 2021
Doug Schwenk, chairman of Digital Assets Research (DAR) told Finance Magnates that he believes Bitcoin may have further to go before another pullback.
“BTC has just bounced back from $51k around options expirations a week ago to approach the $60k level again,” he told Finance Magnates. “There are clearly strong tailwinds on price given the speed of recovery.”
What’s causing these tailwinds to blow so strongly? In addition to the recent news about PayPal and Visa, Doug pointed out that “we continue to see positive news in institutional adoption, such as Goldman Sachs plans to offer to wealth clients and continued ETF filings and approvals in Canada and Brazil, as well as filings in the US.”
“It’s easy to imagine BTC breaking the psychological $60k barrier and moving higher if there continues to be mostly positive news,” he said.
Beyond the world of institutional investors, markets could potentially be boosted by positive regulatory news in the United States. “The entire industry is waiting to hear what Gary Gensler as the new chair of the SEC and what other new regulators at the CFTC and OCC will say about clarity and support,” Doug pointed out.
However, this anticipation could go both ways: “any comments that appear negative could easily drag BTC back in the short term, as could positive progress on a Central Bank Digital Currency (CBDC).”
Large institutions are accumulating Bitcoin at record speed
Even if a pullback is possible in the short-term, Justin Hartzman, CEO and Co-Founder of CoinSmart, pointed out to Finance Magnates that “analysts [have been] calling for much higher prices this year.”
“I think as we see more institutions enter the market and inflation as a result of printing of money across the world, the more the mass…