Cryptocurrency Analysis

[IFX_Selena]

Bitcoin starts the week with an increase of $5,000



Bitcoin continued to correct on both weekends, and also fell by a rather impressive $2900 on Sunday. But at night, with the beginning of Monday, the bitcoin quotes sharply turned up and increased by $5,000 within a few hours. Thus, there is a high probability that pending buy orders were triggered near the $48,000 level, or that a whole group of traders and investors simultaneously started buying bitcoin with renewed vigor during the night. As we have repeatedly said, the rise or fall of $5,000 for bitcoin is uninteresting. Despite the fact that this growth has already occurred, the correction scenario remains in force. The bulls made a powerful attempt to return the asset to growth. But recall that back in 2014 and 2018, when bitcoin started long downward trends after updating its highs, there were also such attempts to maintain the bullish trend. Roughly speaking, even a downward correction movement cannot take place without upward pullbacks. And over the past 10 days, bitcoin has fallen by $15,000. Therefore, a pullback up to $5,000 is normal, and the only surprising thing is that it happened unexpectedly.

The fundamental background for Bitcoin remains the same. There were no high-profile news or incidents over the weekend. Thus, it is not even possible to conclude that the growth of the first cryptocurrency was provoked by some events. The background remains negative, and most experts continue to expect a decline in quotes in the area of $30-40 thousand. However, keep in mind that the market is composed of buyers and sellers, not experts and analysts. Simply put, if the purchases of the bitcoin resume, even without any fundamental reasons, then the "digital gold" will continue to grow. Although, we believe that the upward trend should end. Here, another important global factor should be noted: the US economy continues to recover, and the demand for bitcoin as an anti-crisis tool may decrease over time. Although, on the other hand, the American economy continues to pump trillions of dollars, and this money needs to be spent, and the cryptocurrency market is one of the possible options for investing money that was like thrown off a helicopter.



In technical terms, bitcoin continues to be below the critical line and below the Ichimoku cloud. The support level of $50,770 was successfully overcome this weekend, but on Monday a strong growth began and now we will need to see where today ends. Below the critical line, the bearish mood persists. Also, sellers need to more confidently gain a foothold below the Ichimoku cloud in order to count on a further fall.





Paolo Greco
Analytical expert
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