Like the stock markets, Bitcoin has fallen sharply in early 2022. This is due to concerns about the potential effects of ongoing macro-inflationary trends and ongoing regulatory crackdowns.
However, the Bitcoin price is already recovering. BTC climbed above the USD 38,000 resistance zone and appears to be looking bullish in the near term. $38,200 is a very strong support for bitcoin. If bulls manage to overtake this level, the next support would be USD 40,000.
Meanwhile, three data suggests that the price of Bitcoin will continue to rise.
Institutional money is starting to flow back into the market
In the weekly Digital Asset Fund Flows report, published Monday, crypto investment firm CoinShares observed an influx for some institutional products. It marks the first time in five weeks that there has been net positive inflow as $14.4 million entered the space as investors bought the dip.
The researchers reported that these influxes occurred during a period of significant price weakness, adding that it suggests investors “see this as a buying opportunity” at current price levels. Analyst Willy Woo also suggested they are early signs that institutional funds are beginning to bounce back.
Bitcoin mining becomes more sustainable
The Bitcoin Mining Council (BMC) announced the findings of its fourth quarter survey on Jan. 18. The research focused on three metrics: sustainable energy mix, technological efficiency and electricity consumption. According to new data, the percentage of the global Bitcoin mining industry that runs on renewable energy jumped 1% to 58.5% in the fourth quarter of 2021. The industry’s estimated technological efficiency also grew by 9%, reaching 19.3 petahash per MW.
“We saw the trend continue with dramatic improvements in the energy efficiency and sustainability of Bitcoin mining,” said MicroStrategy founder and CEO Michael Saylor on January 19.
Indicators point to buying the dip
The crypto Fear-&-Greed index fell to a low of ’12’ on a scale of ‘100’ on January 25. This index is used by many investors to decide whether the dip is present, as many short-term investors like to adopt the strategy of “buy the fear, sell the greed.”
Bexplus analysts point out that Bitcoin could mimic the moves from May to July 2021, when the stock market crash sent the Bitcoin price crashing to $29,500. After that, the Bitcoin price rose again and reached its all-time high.
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