Bitcoin is currently trading at around $38,200 as it pulls back slightly after blasting past $40,000 during late trading on Thursday, January 7. At current prices, the asset is up 33% since the same time last week and it still doesn’t look like it is ready to correct yet.
Looking at centralized exchange movements could indicate when the inevitable correction will occur and eToro’s Mati Greenspan has observed that Bitcoin volumes across exchanges have just doubled its previous all-time high.
Bitcoin volumes across exchanges has just doubled it’s previous all time highest level. pic.twitter.com/Hl5T4N4Sck
— Mati Greenspan (tweets ≠ financial advice) (@MatiGreenspan) January 7, 2021
Other metrics indicate that there has been an increased inflow of BTC to centralized exchanges which could be a precursor to a heavy selloff.
When Will Bitcoin Correct?
Bitcoin has doubled in price since December 15, 2020, when it first traded above its previous all-time high. Messari founder Ryan Selkis observed that Bitcoin’s doubling time, which measures the speed of parabolic moves, has only been faster twice in 2013 and once in December 2017;
Bitcoin’s doubling time (measures the speed of parabolic moves) has only been faster than today 3x in history:
So if you’re feeling whiplash, you’re not alone.
Source: https://t.co/gjaCyRJzeu pic.twitter.com/BFPMgo1ODa
— Ryan Selkis (@twobitidiot) January 8, 2021
Sharp pullbacks usually follow these swift doublings of price. It stands to reason that when the market correction does come, it will be fast and furious as profits are cleared off the table in preparation for buying back at lower levels.
Civic CEO Vinny Lingham remains bullish stating that retail traders are more cautious this time around;
“Bitcoin at $40k and no bubble in sight. Traders that got burnt and left in 2018 are just coming back in. They’ll be more cautious. It’s the wave after that, incl. institutions that will create the peak of this new bubble/bust cycle. We still have time before it peaks.”
Trader Josh Rager on the other hand continues to warn of a 30% or even a 50% correction that could drop prices back to $20k in a very short time. Long term outlooks, such as those lofty predictions by JP Morgan strategists, are still very bullish.
Could shake out a few
$50k + seems like the ideal fomo number to bring in new people
This probably won’t happen, but eventually we’ll see a multi-week 30%+ pullback
— Josh Rager
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