Bitcoin is up only slightly on Monday after seeing its biggest weekly decline in over four months.
At press time, the cryptocurrency is trading 0.2% higher on the day near $35,838, according to CoinDesk 20 data. Prices fell by 6% in the seven days leading up to Jan. 17, a weekly fall not seen since the first week of September.
Bitcoin took a beating a week ago, falling from $40,000 to $30,305 in a matter of few hours, mainly due to heavy selling in the spot market. The cryptocurrency spent the rest of the week trimming losses and tested $40,000 at one point before ending the week (Sunday, UTC) just under $36,000.
However, it may be too early to call an end of the bull market correction, as the cryptocurrency is still trapped in a narrowing price range or triangle pattern on the hourly chart, according to Patrick Heusser, head of trading at Swiss-based Crypto Finance AG.
A move above the top end of the triangle pattern would confirm a breakout and imply a continuation of the broader uptrend.
However, as per Heusser, a rally to a fresh all-time high above $41,962 would offer more credible evidence of a bull revival. That hinges on the pace of institutional inflows, strategists at JPMorgan said in a note Friday.
"The flow into the Grayscale Bitcoin Trust would likely need to sustain its $100 million per day pace over the coming days and weeks for such a breakout [above $40,000] to occur," the strategists wrote.
Grayscale Bitcoin Trust (GBTC), the biggest publicly traded crypto investment trust, reopened last Tuesday after a month-long break. Since then, the trust has accumulated at least 4,700 BTC, according to the Twitter-based GBTC Bitcoin Tracker. If accurate, that's $171 million worth of purchases in six days, significantly less than JPMorgan's required daily average of $100 million.
Grayscale is owned by Digital Currency Group, the parent company of CoinDesk.
Global stock markets are trading on a weak note on Monday, while the U.S. dollar is gaining ground against major currencies. The stronger greenback could hurt bitcoin's price, as discussed last week.
A potential triangle breakdown could pave the way for a re-test of the last week's low of $30,305. According to trader and analyst Nick Cote, $28,500 is key support, which, if breached, could invite intense selling pressure.
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