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Bitcoin (BTC) fell below $ 35,000 on January 15 as the renewed strength of the US dollar put pressure on the largest cryptocurrency. BTC bounced off support at USD 34,300 and is trading at USD 35,300 at the time of writing.

BTC / USD 4-hour candle chart (Bitstamp). Source: Tradingvidw

Bitcoin is going back to $ 30,000

Data from CoinTelegraph Markets and TradingView showed that BTC / USD hit its lowest in more than 24 hours at press time on Friday, with $ 34,000 as support so far.

The previous day saw the pair for the shortest time recover $ 40,000 before falling back to range in a corridor that had formed early in the week. The latest drop reinforced the assumption that Bitcoin would continue in this corridor, which has USD 30,000 as support and USD 40,000 as a rough ceiling.

“Consolidating #Bitcoin is very healthy for the market after the massive boost to $ 41,500,” said analyst Cointelegraph Markets Michaël van de Poppe explained in a series of tweets.

“#Bitcoin is approaching bounce territory here as we rejected the crucial resistance around USD 40,000. Will benefit from further consolidation before the upward momentum continues. All healthy.”

Halving analysis suggests “7x upside potential”

The new downturn for Bitcoin coincided with a rise in the US dollar currency index (DXY) thanks to President-elect Joe Biden’s $ 1.9 trillion coronavirus stimulus plan. Despite the severity of this USD offering expansion, markets appeared to be responding favorably to the plans, pushing DXY up at the expense of Bitcoin, with which it typically inversely correlates.

Context: dollar breaks out on multiple timeframes. Fairly strong recovery in multi-month support area. Some argue this is bad for bitcoin, gold and risky assets, hence the story, “said Cointelegraph’s internal analyst. Joseph Young summarized.

BTC / USD (Bitstamp) vs DXY (Orange). Source: TradingView

Young noted that investors in the derivatives markets “who bought the dip” caused additional headaches, potentially dampening the prospects for a relief rally.

However, zoom out and Bitcoin underperformed if anything compared to previous bull cycles. According to on-chain analytics resource Ecoinometrics, this left the door open for further notable profits.

Bitcoin price after halving comparison as of January 15, 2021. Source: Ecoinometrics / Twitter

“This bull market doesn’t stop at $ 40k,” read part of a tweet featuring a comparative chart.

“With the growth of the previous cycles, we still have 7x upside potential.”