After dropping to a multi-week low of $ 28,850, Bitcoin price made a quick but sluggish recovery at $ 32,500

After falling to a multi-week low at $ 28,850, Bitcoin price made a quick but sluggish recovery at $ 32,000.

after-dropping-to-a-multi-week-low-of-28850-bitcoin-price-made-a-quick-but-sluggish-recovery-at-32500

BTC/USD 4-hour chart | Source: TradingView

Bitcoin price has rallied over the past two days after falling as low as $ 28,850

Following a quick rebound, BTC failed to break through the heavy resistance at $ 33,000, pulling back below $ 32,000 today. Before that, when the price of Bitcoin started falling below $ 32,000, BTC was trading on Coinbase much lower than on Binance.

The lack of premiums on Coinbase is worrying for two main reasons. First, Bitcoin naturally trades higher on Coinbase due to Tether’s small premium. Second, when Coinbase sees lower prices than other exchanges, it shows that there is high selling pressure in the US market. When selling pressure on Bitcoin starts to increase in the US market, the price of BTC will plummet in a short period of time.

However, almost immediately after the BTC rebounded from $ 30,000, the Coinbase premium resurfaced. At the time of writing, BTC on Coinbase is about $ 40 higher than on Binance.

The reappearance of the Coinbase premium after almost 12 hours is a positive sign of a potential trend reversal. However, analysts at QCP Capital, a group of traders in Asia, noticed some signs of “institutional exhaustion”.

Considering that the main story surrounding lately is institutional demand for Bitcoin coming from the United States, the rally could be jeopardized if institutional demand for BTC slows down.

They said:

“Signs of institutional exhaustion: We have been doing time zone analysis to break down BTC’s move into Asian time versus US time (every 12 hours). Since March of the year, Last, the obvious pattern was that the US was constantly buying while Asian miners and whales were selling.”

Traders stressed that US session strength lost momentum for the first time.

In fact, during the past week, much of the pressure to sell BTC has come from Asia. This marked an important change in market sentiment.

QCP Capital added:

“However, after BTC reached the top two weeks ago, US hourly power lost momentum for the first time. This is a clear sign of the exhaustion of demand from US institutions and companies. Who was the main driver of this bull run?”

Bitcoin runs the risk of a correction phase during the first quarter of 2021 if institutional demand for BTC drops.

Various institutional-focused platforms and media, such as Grayscale, are still seeing large inflows of capital, which shows solid institutional need. At the same time, MicroStrategy continues its policy of buying Bitcoin in droves with its newest purchase on Friday for a total of $ 10 million.

Chad Steinglass, head of trading at Crosstower, a digital asset capital market firm, said:

“Today, $ 31,000 is strong support, so at least not everyone is selling. We’ll have to wait and see if that wall still exists or the institutions continue to build up. If they do. Thus, it is likely that the trend will reset on its own and continue. If they move to the sidelines awaiting further guidance on regulation.”

At the same time, the possibility of a broader correction remains if the US market continues to see an overall decline in the desire to accumulate BTC, especially if the dollar continues to recover in 2021.

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