Bitcoin: how long it may recover?

A slump in the bitcoin price stopped at the level of $48,000 per coin. Today, a daily candlestick showed a strong impulse and a confident bullish trend.

Thus, the reverse signal is formed. However, it is difficult to say how long the uptrend will last.

A collapse in the main cryptocurrency was intensified by the news about higher taxes proposed by Joe Biden. This fact is still exerting pressure on BTC. It is quite possible that the government will adopt a slightly lower tax of 39.6% compared to 40% proposed by the US President. It is still unclear whether the market participants priced in this information or not. Everything depends on the development of the situation.

Peter Brandt, a legend of the old trading school, in his Twitter, wrote that decisions made by Biden during his presidency could have an extremely negative effect on bitcoin.

Brandt emphasizes that in some states, taxes could be raised up to 55%. At the moment the income tax is 20%. This means that to pay taxes, traders will invade the market with bitcoins.

However, in Peter Brandt's portfolio, bitcoin's share is the largest among other cryptocurrencies. Despite a negative effect from the tax issue, he is still among the bulls. He also added that his opinion was not a forecast for a drop in bitcoin.

Let us take a look at the technical factors. It is quite possible that the recent slump was not a break of the uptrend, but its expansion. At least, there are two consecutive lows logged on February 28 and April 26. If we put a trend line on the mentioned lows and place the channel line at the maximum levels between them (the peak logged on April 13), the historical maximum will be on this resistance level.

However, a real trend could be determined only after a third rebound from the support level., Judging by the two lows and a maximum between them, there are prerequisites for this. If a wide upward channel of $43,033.38 – $47,017.82 – $61,759.10 formed on February 28 is real, the bitcoin/dollar pair may continue climbing to $67,000 per coin.

At the moment, bitcoin is trading above $50,000. This is a good signal. If the price breaks the local resistance level of $53,980.47(a blue dotted line) and consolidates above it, the next target will be located at $57,513.35 (the next blue dotted line). If this forecast comes true, we will be able make further predictions.

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The material has been provided by InstaForex Company - www.instaforex.com

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