Cryptocurrency Analysis

[IFX_Selena]

What helped Bitcoin - the level or Elon Musk?

Only the lazy people did not write today as Elon Musk announced the possibility of buying Tesla electric cars for bitcoins. Indeed, the hype news supported the main cryptocurrency, but we should look deeper here.

For short-term forecasts and trading positions, technical analysis remains the best tool in any market. Quotes are pushed by large players and the appearance of strong price levels on the charts indicates that they are defending their positions. For mere mortals or small speculators, these observations allow you to see both the entry point to the transaction and to assume the direction of the price.

Well, let's look at the chart. In yesterday's review, it was noted that bitcoin has reached the level of support for the upward trend 29241,46 - 43033,38 - 58340,66 from January 27. And today, it quite technically bounced up from it. This means that the upward trend is not broken and the main cryptocurrency has a chance to grow.

But let's take a closer look. On the four-hour chart of BTC USD, you can see that there is a horizontal support of 53980.77 (marked with a red dotted line) at the intersection with the upward trend support. This means that the rebound point is a double strong support level, which the big players would still protect from a breakdown. And Elon Musk, with his short-term hype, only gave confidence to buyers.

What's next? From a technical point of view, the BTC USD has a small power reserve to the level of 58340.66 (the maximum from February 21). And there is a resistance line at the local downward trend of 61759,10 - 59869,35 - 53225,61 from March 13. And if this border at the intersection of resistance levels can be overcome, BTC USD will have a chance to return to the historical maximum.



As for the long-term prospects of bitcoin and digital currencies, there are also interesting opinions here. While some central banks are working on their own cryptocurrency, on the contrary, others do not leave skepticism, especially in relation to bitcoin.

So, the manager of Norges Bank, Oystein Olsen from Norway, said that bitcoin will not be able to become a means of payment, because it is very expensive, resource-intensive and unstable.

But the Bank of Norway does not believe that new technologies have potential. Simply, according to the regulator, they are not of much use. At the same time, he continues to work on his own project of the Central Bank's Digital Currency (CBDC). A report on how the development is progressing is due to be released in April.

A representative of the Norwegian regulator noted that users should be able to quickly make payments in Norwegian kroner. At the same time, CBDCs should not affect credit intermediation in the private sector.

In parallel, China is working on the creation of a digital yuan, and the Federal Reserve Bank of Boston (USA) promised to publish the results of its study on the digital dollar in the summer of 2021.




Ekaterina Kiseleva
Analytical expert
InstaForex Group © 2007-2021