OSL Daily Update - January 22, 2021 

$BTC 24 Hour High $34,981
$BTC 24 Hour Low $28,953
$BTC -6.4% 

The price of $BTC has tumbled this past week and has created a tsunami of press. Of course, their job is to draw attention to the happenings in the market and will just as easily cover another surge in price like we saw at the beginning of the year. For rational investors, we must study the charts and facts. This recent drop is being debated in the media and seized on by skeptics based upon a perceived double-spend, which has in turn created a “FUD” phenomenon.

From our vantage: There was no double spend. The drop in $BTC price, and subsequent run on other digital assets, can be attributed to unfounded “fear, uncertainty and doubt” (FUD) related to an otherwise normal and benign US$22.00 transaction. At the time of this particular transaction two blocks were mined simultaneously and it took 10 minutes for the blockchain to organize and verify the parent transaction. This created the appearance of a double spend, but in actuality was a normal transaction that was verified as expected on the blockchain.

As a result, today we saw the US session sell-off as a result of this FUD exiting the market, amounting to more than US$1.1bn liquidation in 24 hours (one of the biggest one-day sell offs since Jan 10). 

Over the past few days, $BTC has been trading approximately 30% lower than the most recent ATHs and we’ve seen Asia take profits in $BTC in the lead up to Chinese New Year - which is consistent with past years. Whether we see these swings continue beyond the CNY effect will be left to be seen, if there’s more fear, uncertainty and doubt exiting the market. 

Our Head of Americas, Fernando Martinez, told Bloomberg earlier, “The key level to watch for $BTC below $30K is $27,750 -  if it breaks that level, we may retest $25,800.”

Many investors allocate into Bitcoin and hold. They will be less stressed over the long-term prospects for Bitcoin. The price swings will certainly attract more media attention and bring the skeptics out of the woodwork, but investors with solid investment strategies will be watching the zoomed out charts, more than the news, and trading accordingly. 

 

OSL Trader View and Weekend Digest are contributed by $, Stefan Chu and Santiago Nazaretti

 


 

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