Is It Another Chance for BTC to Hit $40K This Week?
In the past week, Bitcoin experienced another correction. Though the correction has not reached critical support levels, it has fallen in price by 32%! And now, for many investors and traders, it is becoming obvious that if in the near future that Bitcoin falls below the $30,000 mark again, then the selling power may continue…
However, based on some fundamental reasons, Bitcoin may keep the bullish run. For example, large institutional investors have been getting into the crypto market since the Q2 of 2020, which in turn was facilitated by the COVID-19 pandemic, as well as fiscal stimuli from, first of all, the US Federal Reserve, which lowered interest rates and flooded the market with devalued dollars.
Now that the correction of the BTC / USDT pair “exceeded the expectations” of some investors, they are tormented by the question: could Bitcoin be just a temporary measure to preserve capital, and now, institutions are starting to curtail purchases of digital assets?
Well, such an opinion also takes place. However, the data on the cryptocurrency market capitalization suggests that this time the decline in bitcoin price is not accompanied by an exit to fiat. Investors, fixing profits on the main cryptocurrency, do not leave the digital market, but open positions on more promising altcoins. In past seven days, the total capitalization, including Bitcoin, decreased by 9.5% (from 1.028 trillion to $ 0.933 trillion). At the same time, the capitalization of altcoins remained at the same level of $300 billion. The share of Ethereum, on the contrary, increased — from 13.52% to 15.01%.
The statements of the new US administration also inspire some optimism. So the candidate for the US Treasury and former Fed Chairman Janet Yellen, speaking about possible improvements to the traditional financial system, encouraging the use of cryptocurrencies, if it, of course, occurs within the framework of the law. But what these laws will be, time will tell.
Technical Analysis on BTC/USDT
The signal line of the RSI indicator on the weekly chart is close to the resistance level, and if there is a crossover from top to bottom, then the correction will continue. In this case, there is a possibility of seeing Bitcoin even near the $20,000 mark! Of course, in this case, this kind of correction may frighten off some investors, but there are also those who are already preparing to buy at such a favorable price.
However, on the daily chart, at the moment the price rests against support, from where a rebound is quite possible. The RSI indicator in the neutral zone also indicates a possible resumption of the bullish trend. The MACD indicator is still in the zone below zero, however, it is starting to decline, indicating a possible transition in the opposite direction.
For those who wants to place short orders, to wait for the confirmation of the downtrend on the weekly price chart, namely, when the RSI indicator is below 70%, and the price is below the last bottom, that is, below $29,000.
But for longing, in order to avoid big losses in case of continuation of the correction, it is better to wait for confirmation of indicators that the trend is again bullish. If, nevertheless, you decide to open a long trade at the moment, it is better to set the Stop loss slightly below $28,500.
Disclaimer
The material herein is provided for informational purposes only and should not be construed as investment advice or an offer or solicitation to buy or sell cryptocurrencies or derivatives. The material is not intended to be used as a general guide to investing, or as a source of any specific investment recommendations, and makes no implied or express recommendations concerning the manner in which any client’s account should or would be handled, as appropriate investment strategies depend upon the client’s investment objectives.
