Bitcoin rushed up again after the announcement of the results of the Fed meeting last night. However, its growth was hardly caused by new purchases of "digital gold" this time. The US currency fell in price yesterday across the entire spectrum of the market, so bitcoin, the value of which is determined in dollars, rose in price precisely because of the fall in the dollar. The growth of the number one cryptocurrency has already stopped today and the correction movement may even be resumed. Recall that all the latest news concerning "digital gold" was, as is usually the case, contradictory. For example, one of the most important news of recent times was the statement of the Indian authorities about the possible complete ban of bitcoin and other cryptocurrencies on their territory. Many other countries continue to impose taxes and restrictions on the cryptocurrency sphere. And various researchers warn that miners may soon begin to get rid of the mined bitcoin coins and bring the rate down. In addition, in the first quarter of 2021, most of the investors in bitcoin were individuals, and not institutions. It is individuals, and especially small investors, who pose the greatest danger to bitcoin. Such investors are chasing short-term profits and are not ready to keep bitcoin for years in the hope that it will grow to $100 or 200 thousand. So if the market goes south, many small and private investors will rush to get rid of bitcoin. And after that, the future of bitcoin will depend only on whether institutional traders maintain a high demand for the coin. If all the coins that small and private investors want to sell immediately go to the institutions, the demand for bitcoin will not fall or will fall, but for an extremely short period of time. Just like its course. But if the institutions support the sale of bitcoin, there may be a collapse of 50-60% of its current value. So far, the number one cryptocurrency continues to trade near its absolute highs.
As for the technical picture, the bitcoin quotes are still located above the critical Kijun-sen line at the moment, which lies at the level of $52,340. Another strong support area is located between the levels of $43,000 and $44,000. Thus, these two supports maintain the upward trend on bitcoin for the time being. However, it is worth noting that in recent weeks, the upward momentum has weakened, and there is no new positive fundamental background for bitcoin. Ergo, it is possible that a new attempt to fix the price below Kijun-sen will be successful, which in turn will provoke a drop to $43,000 per coin, at least.
The material has been provided by InstaForex Company - www.instaforex.com