According to trader Brian Krogsgard, a period of sideways price action could be healthy for Bitcoin
After rallying above $40,000 and a correction that ended near $30,000, Bitcoin (BTC) has rebounded once again. However, a stall before breaking through the highs near $42,000 could be positive for the asset, according to Brian Krogsgard, a trader and podcaster known on Twitter as LedgerStatus.
“Bitcoin’s correction has been healthy amid a strong bullish backdrop, moving back toward the 20-day moving average,”
Krogsgard explained to Cointelegraph on Thursday. “After the strong recovery, it’s time to find out if it will continue immediately upward or stay longer in a prolonged consolidation, which in my opinion would be healthy.”
On Thursday, Bitcoin Rush barely broke above $40,000 before retreating slightly, reentering the range around $39,000, TradingView.com data indicated.
Breaking above $36,000 was a major move for the asset, according to comments from CryptoWendyO, a trader and analyst on Twitter. “If we don’t regain the $36,000 I don’t rule out a further collapse,” he told Cointelegraph on Jan. 12, ahead of Bitcoin’s recovery above that level.
New comments from CryptoWendyO express optimism about the price. He recently explained to Cointelegraph:
“Bitcoin has charted a fantastic recovery from my support zone at ~$34,200 after the sharp drop of about 25%. However, I doubt the fundamentals of 2020/2021 will be any different from Bitcoin’s previous history, currently I believe we will continue to rise and I foresee a reversal at $42,000 to mark a similar uptrend to the one following the January 7 correction from ~$34,200 to ~$28,000 to test ~$48,000.”
As for the recent price action, Krogsgard sees a correlation with one of Bitcoin’s products aimed at the mainstream market. “It appears that the closure and reopening of GBTC deposits has had a strong impact on coin demand as the market reopened to a low,” Krogsgard speculated. “I think we will continue to see institutional demand with each contraction.”
Managed by Grayscale, GBTC is essentially Bitcoin in share form, with each share guaranteed by a fraction of a Bitcoin. In December, the company suspended investments in its Bitcoin Trust, reopening them a few days ago.