The Bitcoin (BTC) market bias stands divided on how to interpret the BTC price crash this week, wherein the pair lost more than 35% of its value at one point on Wednesday, crashing to as deep as $30,000 on Coinbase.

Global media outlets attributed the plunge to China reiterating its anti-crypto business stance and Tesla suddenly discontinuing Bitcoin payments for its electric vehicles.

Traders buy the dip, leading Bitcoin to bounce immediately after testing $30,000. Source: TradingView.

Nikolaos Panigirtzoglou, managing director for global market strategy at JP Morgan, further noted an ongoing decline in the capital that flows into publicly listed Bitcoin funds. He suspected a rotational investment setup, wherein institutional investors were winding up their positions in the Bitcoin futures market and reallocating the proceeds to build long positions in gold funds.

“It is not clear what is driving this shift,” Panigirtzoglou added.

“Perhaps institutional investors are fleeing Bitcoin as they see its previous two-quarter uptrend ending and thus seek the stability of traditional gold away from the rapid downshifting of digital gold.”

He nevertheless reminded that Bitcoin’s momentum signals remain in positive territory. Thus, it is still too early to declare the end of the bull market.

Bitcoin dominance awaits rebound

Stack Funds head of research Lennard Neo also presented a similar, near-term upside setup, citing a potential rotational setup, but from altcoins to Bitcoin.

Lennard cited the recent directional trends in the Bitcoin market and its strength against a vast pool of alternative digital assets, dubbed as the Bitcoin Dominance Index. He noted that the net crypto market capitalization surged by around 40% as Bitcoin’s dominance against altcoins declined from 73.5% to 40.5%.

Bitcoin Dominance Index (blue) vs. crypto market capitalization (red). Source: Stack Funds

That suggests many investors remained entrenched within the cryptocurrency markets, focusing mostly on transferring their Bitcoin gains to altcoins that seemed promising in the short term. Neo added that Ether’s 180% year-to-date surge late last month emerged from the same Bitcoin-to-altcoin setup.

But now, the capital will want to fly back into the Bitcoin market, the former Bloomberg analyst stated, adding:

“We believe the rotational playbook has reversed as dark clouds loom over the markets. We are expecting investors to cycle back into Bitcoin as uncertainties increases as the markets undergo another reset. Hence, a bounce in Bitcoin dominance should occur, further supporting Bitcoin’s price in the short term.”

Pretty “routine”

Veteran hedge fund manager and investor Ben Miller also came out in support of Bitcoin’s bullish bias, calling its recent downside correction a “routine pullback.”

“If I liked something at higher prices, it is a safe bet I will like it even more at lower prices,” said the former Legg Mason Capital Management chief investment officer as he cited similar Bitcoin price dumps during the mammoth 2017 bull market.

But bearish woes continue to offset the bullish predictions, especially as Guggenheim chief investment officer Scott Minerd, who called for a $600,000 price target for Bitcoin, did a complete backflip while referring to the cryptocurrency as “Tulipmania.”

Meanwhile, Mark Haefele, chief investment officer of UBS Global Wealth Management, called Bitcoin an unreliable store-of-value asset over its high price volatility. Julius de Kempenaer, a senior technical analyst at, also noted that Bitcoin’s recent price crash dampened its safe-haven outlook.

Bitcoin was trading above $40,000 at the time of this writing, up more than 30% from its sessional low of $30,000.