Technical Analysis of BTC/USD for January 25, 2021

Crypto Industry News:

Anthony Scaramucci, head of SkyBridge Capital and former White House Communications Director, believes that Bitcoin's value proposition has strengthened significantly now as governments have addressed the many risks associated with digital assets.

In an article published on CNN, Scaramucci and fellow SkyBridge executive Brett Messing say Bitcoin has become a viable option for long-term investors seeking refuge from inflation. The authors also argue that owning Bitcoin is much less risky today than it was a few years ago when the rules and infrastructure were still underdeveloped.

The rise of Bitcoin "has caused the government and institutions to step in and deal with many of the risks associated with digital currency," the authors wrote, referring to the decision by the Office of Currency Controller to authorize banks to provide cryptocurrency services.

"[...] Increased regulation, improved infrastructure and access to financial institutions - such as Fidelity - that hold investors' money - have made Bitcoin investments as safe as owning bonds and commodities like gold," they continue.

SkyBridge Capital caught attention last month when it applied to the US Securities and Exchange Commission to launch a Bitcoin hedge fund. SkyBridge Bitcoin Fund LP was launched a few weeks later - Fidelity acted as the depository, and Ernst & Young was responsible for the audit.

SkyBridge reportedly invested in Bitcoin in November and December, which allowed it to amass a large position in digital assets ahead of its parabolic leap. At the time of the fund's launch on Jan. 4, SkyBridge claimed its exposure to BTC was worth approximately $ 310 million.

Institutional capital was the main catalyst for Bitcoin's 300% growth in 2020, culminating in a new all-time record near $ 42,000 on January 8. So-called smart money investors are beginning to view Bitcoin as a form of digital gold - one that potentially has much higher growth than precious metals.

Technical Market Outlook:

The BTC/USD pair has been consolidating in the narrow zone located between the levels of $31,000 - $33,500 for the last 24h. Moreover, the market keeps trading under the trend line resistance around the level of $34,000, so any violation of this level might lead to another wave up towards $35,000. Nevertheless, the momentum is neutral and the level of $34,000 is the key short-term technical resistance. To ensure the rally towards $40,000, the bulls must break through the golden trend line resistance as well.

Weekly Pivot Points:

WR3 - $45,492

WR2 - $41,554

WR1 - $36,330

Weekly Pivot - $32,457

WS1 - $27,332

WS2 - $23,540

WS3 - $18,286

Trading Recommendations:

Despite the recent corrective cycle the bulls are still in control of the market. The up trend continues and the next long term target for Bitcoin is seen at the level of $50,000, so any correction or local pull-back should be used to open the buy orders. This scenario is valid as long as the level of $20,000 is clearly broken.

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The material has been provided by InstaForex Company - www.instaforex.com

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