He believes that the market will lose a major source of demand once the buying stops, which will cause the price of Bitcoin to drop precipitously. This perspective aligns with Schiff’s long-standing mistrust of Bitcoin. His argument is based on the notion that institutional buying — specifically from MicroStrategy — plays a significant role in determining the price of Bitcoin.
Although it is true that significant purchases can affect market sentiment, it would be an oversimplification to attribute Bitcoin’s entire valuation to the purchasing activity of a single entity. The purchases made by MicroStrategy represent a small portion of the total value of Bitcoin transactions worldwide.
Numerous factors, such as adoption rates, general investor sentiment and macroeconomic conditions, affect the price of Bitcoin. Demand can be maintained even if MicroStrategy stopped making acquisitions because other institutional and individual investors could fill the void. Based on the chart, Bitcoin is currently trading close to $93,000 after recently retreating from the psychological level of $100,000.
The RSI is cooling from high levels, suggesting that the correction is a healthy retracement following an overbought rally. Bitcoin may retest lower supports at $87,000 and $85,000 if the crucial $90,000 support level is broken. In order to revive bullish sentiment, Bitcoin must gain momentum and break above $95,000.
The slight decline in volume indicates some investor hesitancy, but as long as important support levels are maintained, the trend is still positive. Schiff’s worries regarding MicroStrategy’s impact are valid, but given the dynamics of the market as a whole, a total collapse is unlikely. The decentralized structure of Bitcoin and its varied demand are what give it its resilience. The next significant move will be determined by a clear breakout or break down, as the price action currently points to consolidation.
This article was originally published on U.Today
Source: Cryptocurrency - investing.com
