Bitcoin continued to flatline this past week, despite bullish momentum from institutional investors. Per OKCoin data, the cryptocurrency spent the majority of the past week between $30,000 and $34,000, failing to break through any of those key levels.
This consolidation in the BTC price above the critical $30,000 support has resulted in a strong rally in the altcoin market. ETH moved to fresh all-time highs this past week above $1,400 while smaller coins, especially Uniswap (UNI) and Compound (COMP), saw double-digit gains against the U.S. dollar.
Analysts are keeping a close eye on bitcoin as it trends toward the support level of $30,000.
This past week was marked by strong fundamental trends for bitcoin. For one, institutional and corporate players continued to allocate capital to the leading cryptocurrency, while there were some positive developments on the regulatory front.
TL;DR
- Bitcoin consolidated once again this past week, settling in the $30,000-34,000 range.
- This consolidation in the BTC price allowed altcoins to break out of their own consolidation patterns.
- Analysts are keeping an eye on the $30,000 support level in the near term as bitcoin continues to show malaise in its price action.
- The fundamentals of the leading cryptocurrency are bullish despite the boring price action.
- Institutions continued to siphon millions into bitcoin this past week while the asset gained support on Wall Street and in Washington, D.C.
- OKCoin has announced support for BTC transactions on the Lightning Network. The feature — which will decrease fees and increase transaction speed — is set to go live in Q1 2021.
Market snapshot
All prices are in USD and time zones are PT.

Top analysts bullish on BTC
Top analysts remain bullish on bitcoin despite the recent stagnation in the BTC price action. Raoul Pal, a former head of hedge fund sales at Goldman Sachs and a retired hedge fund manager, recently said in a tweet:
“Feels like BTC is getting ready to climb the wall of FUD fear. Positive seasonality and a nice wedge give it a good chance to hit $50k by March. Let’s see… I remain, as ever, #irresponsiblylong.”
His expectations of a move toward new all-time highs were echoed by Bloomberg Intelligence analyst Mike McGlone, who wrote earlier this month:
“Crypto assets in 2021 are initially about the diminishing prospects for Bitcoin to revisit old highs around $20,000 vs. the increasing potential of staying a bullish course toward $50,000 and a market cap of about $1 trillion, the way we see it. Increasing regulation is part of maturation and is more likely to enhance the digital-gold attributes of Bitcoin vs. the other 8,000-or-so so-called cryptocurrencies, most of which are someone’s project and/or liability.”
Part of this optimism is related to Wall Street capital seemingly entering or planning on entering this nascent space.
It was widely reported that this past week, BlackRock, the world’s largest asset manager, may soon allow investment in bitcoin derivatives via its funds. Statements of Additional Information filed with the U.S. Securities and Exchange Commission by the Wall Street giant last week mentioned bitcoin in the following manner:
“Bitcoin is a digital asset whose ownership and behavior are determined by participants in an online, peer-to-peer network that connects computers that run publicly accessible, or ‘open source,’ software that follows the rules and procedures governing the bitcoin network, commonly referred to as the bitcoin protocol.”
Bridgewater, the world’s largest hedge fund, is rumored to be preparing a comment on bitcoin in the near future. This comes in spite of the fact that in 2020, its co-founder Ray Dalio was critical of Bitcoin’s ability to store value or to act as a transaction mechanism.
OKCoin integrates Bitcoin Lightning Network
Just so you all know, we announced late last week that we will be supporting Bitcoin Lightning Network payments starting this quarter.
This feature is not yet live, though when it is, users will be able to deposit into and withdraw from OKCoin with little cost and with smaller transaction amounts than are currently possible.
Our chief executive Hong Fang says that the Lightning Network has reached a point where it is large enough to accommodate exchange-level demand:
“As part of our analysis of the technology, we assessed the strength and quality of the nodes and now feel the network is strong enough to participate as an exchange with a high volume of withdrawals and deposits a day. We hope other blockchain companies follow suit and lift the whole industry up by speeding up bitcoin payments and look further to working further with the Lightning Labs team.”
Our decision to support Lightning Network transactions is a further commitment we have to support the grassroots community around Bitcoin development.
Throughout 2020, we distributed in excess of $500,000 to Bitcoin developers in the form of grants, as part of the OKCoin Open Source Developer Grant program.
Congressman shares Bitcoin white paper
Congressman Patrick McHenry recently shared the Bitcoin white paper on his official House of Representatives website, after the self-proclaimed creator of Bitcoin alleged ownership of the document. Commenting on the matter the Congressman stated:
“Policymakers should be on the side of innovation and ingenuity, which are vital to American competitiveness. I hope others in US govt join me.”
McHenry has been a long-time supporter of Bitcoin within the government, voicing his thoughts on regulations regarding the cryptocurrency. Commenting on the Facebook-led Libra/Diem project in 2019, he said that he likes Bitcoin more than the social network giant’s proposed asset:
“Libra is not cryptocurrency, however. And we need to stop lumping it together with very real, very important projects that are out there like Bitcoin.”
He is one of at least a half-dozen Congresspeople in the U.S. that have been supportive of Bitcoin and cryptocurrency, though there are others that have been against this space.
MicroStrategy adds to its BTC position
American business services company MicroStrategy added $10 million worth of BTC this past week to its already-sizeable position in the leading cryptocurrency.
This addition to its already large bitcoin position comes as Michael Saylor, the company’s chief executive, has begun to push for corporate America to adopt bitcoin en-masse.
In an interview with CNBC late last week, he said that he will soon be hosting a conference in the coming weeks that will allow executives and investors to learn more about BTC and how they can implement it into their businesses:
“We’re going to have thousands of executives, officers…directors, & advisors of corporations coming together in the first week of February. They all want to figure out how to plug #bitcoin into their balance sheet or their P&L…We’re going to open source it.”
Saylor said he expects thousands of individuals to show up to this virtual event.
Many think that for bitcoin to truly succeed in the coming rally, there will need to be Main Street players that allocate capital to the leading cryptocurrency and the larger space. We talked more about this trend last summer.
Marathon buys bitcoin too
Following MicroStrategy, the U.S.-based bitcoin mining company Marathon Patent Group recently announced its major purchase of BTC. According to a press release, the company spent $150 million to purchase 4,812.66 bitcoin at an average price of $31,167.
The company sees this move to strengthen its position as way for retail investors to obtain exposure to BTC in an indirect sense:
“As a result, the Company has strengthened its position as one of the only Nasdaq-listed, pure-play investment options for individuals and institutions seeking exposure to Bitcoin,” the press release reads.
The firm’s chief executive Merrick Okamoto says that they see bitcoin as a better investment than the U.S. dollar in the long run:
“By purchasing $150 million worth of Bitcoin, we have accelerated the process of building Marathon into what we believe to be the de facto investment choice for individuals and institutions who are seeking exposure to this new asset class. We also believe that holding part of our Treasury reserves in Bitcoin will be a better long-term strategy than holding US Dollars, similar to other forward-thinking companies like MicroStrategy.”
FinCEN extends the comment period on controversial regulation
It was just announced that the Financial Crimes Enforcement Network branch of the Treasury will be extending the comment period on its proposed rule to require exchanges to take more personal information from their customers. This will allow the public and stakeholders to comment on the potential impacts of this regulation.
In December, the Treasury proposed a regulation that, if implemented, would require digital asset service providers to take the personal information of investors looking to withdraw more than $3,000 worth of cryptocurrency to their own addresses. The regulation suggested that bitcoin and other digital assets are actively used for money laundering, amongst other crimes.
Many in the crypto-asset space immediately rebutted the comments, saying that this regulation would be ineffective and actually redundant. OKCoin also responded to the situation, noting that “there is no evidence to indicate that the volume of illicit activity that is conducted via cryptocurrency transactions has risen to a level that it poses an immediate threat to national security.”
On-chain BTC trends
According to blockchain analytics firm IntoTheBlock, BTC is currently “mostly bearish” as per their seven core metrics, which are based on on-chain trends and market data such as order books.
Four out of seven of the platform’s core metrics are currently in “bearish” territory. Those four core metrics are net network growth, in the money, large transactions and smart price. These are metrics that span on-chain trends and exchange signals. The exchange signals indicate that there is some buying pressure despite the on-chain trends.
Of note, the firm’s concentration on-chain metric is “bullish,” indicating that there is buying pressure amongst large-scale holders, or so-called “whales.”
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