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 shows that BTC / USD is bottoming out in more than 24 hours at the time of release on Friday, with USD 34,000 as support so far.

The previous day saw the pair briefly recover $ 40,000 before falling back into 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 MichaĆ«l 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 US dollar offering expansion, markets appeared to be responding favorably to the plans, pushing the DXY up at the expense of Bitcoin, with which it tends to be inversely correlated.

“Context: The dollar breaks across multiple timeframes. A pretty strong recovery in a 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 was almost underperforming compared to previous bull cycles. According to on-chain analytics resource Ecoinometrics, this left the door open for further notable profits.

Price comparison after Bitcoin halving as of January 15. 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.”