Dmitry Gurkovsky, leading analyst at RoboForex, tells about further possible scenarios for Bitcoin price movement .
After another update of the historical maximum, the BTC / USD quotes from the level of $ 58 350 went into a deep correction. Many traders who bought the asset “at the top” were again in a bad situation – after all, the fall exceeded $ 13,000 .
Experienced investors recommend buying during a strong decline in the value of an asset, so it is likely that the current correction will give a chance to profitably enter the cryptocurrency market.
On the daily chart, quotes have tested the fast moving average. Earlier, on a strong bearish correction at the time of the fall to the level of $ 28,620, there was also a “tight” test of the area between the moving averages. After it, the price continued to move within the uptrend.
An important support area is located between the levels of $ 42,200 and $ 44,800. The lower border of the ascending channel is also located here, so in the case of another approach to it, it is worth considering a qualitative rebound of quotations upwards.
The nearest growth target will be the level of $ 65,000.
The catalyst for the current movement of digital currencies was Elon Musk’s remark about the high cost of Bitcoin and Ethereum. Tesla shares were also seriously losing value and reached the level of $ 618, which was a record drop since September last year. Investors began to blame the company for this “crash” in connection with the large purchases of bitcoins that preceded it.
At the same time, some analysts point out a negative tone towards cryptocurrency during Janet Yellen’s speech, which could have exerted strong pressure on Bitcoin and the entire crypto market in general. The rhetoric of the US Treasury Secretary is no different from the reports of the heads of central banks, who are also worried about the high volatility of BTC and the fact that such assets are often used for money laundering and tax evasion.
At the same time, many former bears already admit strong growth of cryptocurrencies today and are not ready to take short positions in these assets. This was stated by Bill Gates, whose position in relation to bitcoin as a means of investment is now neutral .
In 2018, this well-known entrepreneur repeatedly spoke out in favor of the BTC short . Now he warns against “blind” following the recommendations of Elon Musk, noting that he has a huge amount of funds, unlike ordinary investors.
Michael Burrie has a similar view of the growth of the entire cryptocurrency market in the short term. But he is also not ready to open deals for the sale of digital currencies, even despite the risks of pressure on these assets from the government.
On the 4-hour chart, the RSI indicator fell below 30 for the first time in February this year. Earlier, such declines in the indicator indicated the completion of downward corrections and continued development of bullish impulses. However, one should not exclude one more price movement to the level of $ 44,800 and the beginning of its growth after a rebound upward.
In this case, there will be a potential for the formation of a “Double Bottom” reversal pattern, and an additional signal in favor of growth will be a test by the price of the lower boundary of the ascending channel. Expect the development of a bearish correction only if the lower boundary of the ascending channel is broken with the price fixing below the $ 40,000 level. Here, the target of the fall can be considered the $ 29,000 level.