Bitcoin’s rally in the first quarter of 2021 has reached a key trading point of $28,000, but the cryptocurrency’s advance has stalled, according to analysts. Over the last three weeks of trading, Bitcoin has been trading within 15 percent of a key trendline, its average price over the past 30 days, in what is being called range-bound trading.
Alex Coffey, senior trading strategist at TD Ameritrade, noted that the cryptocurrency is “chopping around that level right now” and “sort of just drifting”. The initial rally came after the fallout of several US lenders last month, leading investors to resurface narratives around the cryptocurrency being a hedge against inflation and a safe haven amid turmoil at traditional banking institutions.
While the cryptocurrency’s upward price action was initially driven by Bitcoin faithfuls in March, Aya Kantorovich, former head of institutional coverage at FalconX, noted that there are no net new users and that the immediate reaction will be either retail or already engaged crypto traders or institutions.
Institutional investors sought safety elsewhere in products such as exchange-traded funds (ETFs) or mutual funds, leaving crypto to inspire little new buy-in. There is not “a narrative for any price action currently”, Kantorovich added. In the meantime, speculators have turned their attention to other tokens, such as Dogecoin, which surged as much as 30% after Twitter featured the dog meme on the home button to the site.