After reaching a peak close to $65,000, Bitcoin took a downward path that took the price below $35,000 towards the end of May. Look for the bounce.
After reaching a peak close to $ 65,000, Bitcoin took a downward path that took the price below $ 35,000 towards the end of May. The market is divided between those who project new setbacks for the next few months and between those who project that there will be a rebound.
This Wednesday the main cryptocurrency remains above $37,000. And the rest of the digital assets continue to rise with Ethereum at $2,680 and Tether at 1 to 1 with the dollar.
Peter Brandt, CEO of Factor LLC and a seasoned commodity trader, was quite pessimistic about the future of the world’s leading cryptocurrency. The thought was reflected in a tweet in which he challenged to find a case in which Bitcoin has registered an all-time high just seven months after plummeting almost 50%.
His followers found, for example, cases such as March 2020, the month in which the crypto asset reached a record of more than $ 20,000 eight months after falling to $3,850. However, Brandt was strict about the time period as the recovery took more than seven months.
According to some market analysts, Brandt wanted to forecast further declines as all declines on this scale with long rallies were from a starting point where the price was above “fundamental valuation.”
Other specialists begin to glimpse that Bitcoin has been having less volatility in recent days, which historically corresponds to important upward and downward movements. It remains to be seen which path the asset will take.
Rekt Capital looked to Bitcoin’s 50-week exponential moving average (WEMA) to argue that it is “back as support despite lower overall levels, and historically, this has been a key bullish flag.”
“In a sustained bull market, you can have a downturn period that is very deep, but as long as this downturn period stays above this bullish momentum indicator, the WEMA 50, we can keep that bullish momentum preserved and the price rally. it may actually continue later, ”they explained.
It should be remembered that the bearish behavior of Bitcoin accelerated after Elon Musk, owner of the electric car manufacturer Tesla, announced the suspension of its purchases with the cryptocurrency due to the high environmental impact that its “mining” has.
There are several analysts who believe that a bullish cycle is coming. Their forecasts are based on five pillars: advanced China, devaluation of the dollar, a greener bitcoin, official support, and Bitcoin as an investment. (For more information read this note)
Bitcoin closed in May its worst month since September 2011 with falls of almost 40%. From its mid-April peak near 65,000, the top cryptocurrency fell about 45%. Despite this, there is optimism in the sector.
For example, according to Robert Kiyosaki, investor and author of the book ‘Rich Dad, Poor Dad’, the fall of Bitcoin “is great news.” “When the price reaches $27,000, I will buy again. Much will depend on the global macro environment, “said the businessman.
Although it failed to reconquer the $40,000 that now offers strong resistance, bitcoin’s slight recovery poses a hopeful scenario after a week with the largest effective losses in the history of the cryptocurrency market.
Analysts are optimistic despite losses in recent weeks. According to Willy Woo, there are indicators that point to a market recovery, as reported by a site at the beginning of the week. Previously, the researcher had warned that this recovery would be slow and could take months.
According to the most recent report from Glassnode, despite the price drop, a vast majority of Bitcoin addresses are holding onto profits. In total, 76% of the coins distributed on the network are above the price they were the last time they moved from one direction to another, which is considered a direction in profit.
“We do not know what the value of bitcoin will be tomorrow, in a week or in a month. But what we do know is that there is a macro trend that generates more and more money for bitcoin.” This quote belongs to the analysis firm Ecoinometrics, according to which bitcoin remains in the bull cycle despite the recent price drop.
According to the researchers, the cryptocurrency maintains a pattern that has been repeating after each halving of rewards for mining, the event known as halving that occurs approximately every 4 years.
On the skeptical side, Bank of Japan head Haruhiko Kuroda joined the list of central bankers who expressed doubts about the usefulness of cryptocurrencies in the real world.
“Most of the trade is speculative and volatility is extraordinarily high. It is hardly used as a means of payment,” Kuroda said of Bitcoin in almost coincidental statements with his peers at other central banks around the world, Bloomberg noted.
The president of the United States Federal Reserve, Jerome Powell, had said a month ago that cryptocurrencies are simply vehicles for speculation, and similarly, the vice president of the European Central Bank, Luis de Guindos, said that tokens should not be considered real investments.
“Looking at the unrest in the cryptocurrency market, there is a chance that we will see another bumpy weekend in trading Bitcoin and other cryptocurrencies,” said Ipek Ozkardeskaya, senior analyst at Swissquote.