Earlier, we said that it is possible for bitcoin to return to the level of $42,300, but this time, it exceeded the plan and eventually reached the level of $45,000. According to the results of the past day, bitcoin failed to gain a foothold above the resistance level of $43,852, so there are doubts that the cryptocurrency is able to continue its growth. Theoretically, bitcoin, like any other digital asset, can become more expensive as much as you want and with any fundamental background. This is because the basis of its growth or fall is simply the belief of investors in its growth or lack thereof. Thus, by and large, everything depends on whether the majority of market participants believe in bitcoin or not. However, we still try to link the current fundamental background with the movement of the first cryptocurrency, and not trade randomly.
The fundamental background remains negative. Apart from the words of support from Elon Musk, Jack Dorsey, and Cathie Wood, which were voiced a couple of weeks ago, there is no positive information for bitcoin. The "digital gold" could have risen so much due to the words of Elon Musk that not only he and Tesla own bitcoin, but also his other company SpaceX. However, from our point of view, it would be completely absurd if bitcoin became more expensive by $15,000 simply because another company of Musk bought a certain number of bitcoins. Thus, we remain committed to the correction scenario, which will continue for the next year or two. We believe that before a new bullish trend begins, the cryptocurrency should fall more strongly in price, and more time should pass since the end of the previous upward trend. Thus, we expect that the downward movement will begin in the coming days, and the breakdown of the upper border of the expanding side channel on the daily timeframe is false. However, at the same time, there is a very clear ascending trend line on the 4-hour timeframe, so it will be better to sell bitcoin when the price is fixed below it. It should also be noted that the debate regarding the new bill continues in the United States, according to which almost all participants in the cryptocurrency market will have to report to the US Tax Administration for each transaction and pay taxes. This bill has already been publicly criticized by Jack Dorsey and Elon Musk, but it is not yet known whether it will be adopted at all and when it will happen. We believe that the legislation on regulating the circulation of bitcoin will be tightened in the United States in any case. And this is negative news for BTC.
Technically, bitcoin is fixed above the expanding side channel on the daily timeframe. This suggests that the growth of quotes may continue, but we believe that this is a false breakdown. At the moment, the price has worked out the level of $43,852, but could not gain a foothold higher. Thus, before the price fixes above the level of $43,852, it is more likely that a new fall in bitcoin will begin. So far, bitcoin has an excellent chance of falling to the level of $40,700.
The material has been provided by InstaForex Company - www.instaforex.com