The prospects of rotational trading from altcoin markets continue to support Bitcoin's short-term investment case. Bitcoin's momentum metrics remain bullish in contrast to the altcoin market. Analysts believe that after the $30K 'Reset,' traders will return to Bitcoin.
The BTC market is split on how to view this week's Bitcoin price collapse, in which the pair lost more than 35% of its value at one stage on Wednesday, plummeting to as low as $30,000 on Coinbase.
According to global media reports, the drop was caused by China reiterating its anti-crypto business stance and Tesla abruptly discontinuing Bitcoin payments for its electric vehicles.
JP Morgan's managing director for global business policy, Nikolaos Panigirtzoglou, also noticed a continuing decrease in capital flowing into publicly traded Bitcoin funds. He suspected a rotational trading scheme in which institutional investors were selling their Bitcoin futures positions and reallocating the proceeds to create long positions in gold funds.
“Perhaps institutional investors are leaving Bitcoin as its previous two-quarter uptrend comes to an end, and they want the stability of physical gold rather than the rapid downshifting of digital gold.”
He did, however, point out that Bitcoin's momentum indicators are still bullish. As a result, it is still too early to call the end of the bull market.
Lennard Neo, head of research at Stack Funds, presented a similar near-term upside setup, citing a possible rotational setup.
Lennard cited recent directional developments in the Bitcoin market as well as the Bitcoin Dominance Index's power against a large pool of alternative digital assets. "As dark clouds loom over the markets, we assume the rotational playbook has reversed," he said.