Is Bitcoin's growth over or is this just another small pullback? - Kakiforex.com - Financial Market Media No. 1 in the World Is Bitcoin's growth over or is this just another small pullback? Is Bitcoin's growth over or is this just another small pullback?
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March 16, 2021

Is Bitcoin's growth over or is this just another small pullback?

 This weekend, Bitcoin has managed to update its all-time highs and reached $ 61,000 per coin. However, it started to decline on Monday, which is alarming. It was mentioned in the previous articles that the main digital asset can avoid the 2017-2018 scenario, when the price of the cryptocurrency fell by 90%, since large institutional investors arrived this year in the crypto market. This behavior is explained to be typical for small traders and investors, and most of the Bitcoin owners were just small traders at that time. Therefore, as soon as the markets felt that the price of the indicated cryptocurrency started to fall, a massive sell-off of cryptocurrency immediately followed, which caused a collapse. And since novice traders are chasing short-term profits, they have not kept bitcoin in their wallets for many years, in the hope that its price will rise to $ 100,000.


However, large investors and institutionalists can afford such a long-term investment, since they clearly do not have the last money. The thing is that not all bitcoin coins are concentrated in their hands. The share of inexperienced players or "hamsters" still remains quite high, so the question is, how will institutions behave when the mass sale of bitcoins by small owners, rather than a usual correction, begins? It is expected that they will either hold their course or they will follow the example of other smaller colleagues.


It should also be understood that Bitcoin's price has risen by more than 15 times last year. It is hardly necessary to explain to anyone exactly how the last year differs from other years. Central banks are pouring trillions of dollars into the economy, interest rates are ultra-low, GDP has collapsed dramatically, business activity has been in a negative zone for a long time, and investors have been panicking to find tools that can protect against inflation, as well as yield more than on government securities. All this led to the fact that Bitcoin began to invest exclusively as a crisis option. Therefore, the first hypothesis suggests that as the global economy recovers, the demand for bitcoin may decline, which will lead to a drop in its value. However, no one knows when this will happen. In the near future, the US economy will be flooded with another $ 2 trillion from the US government, and according to rating agencies during the pandemic, Americans have accumulated about $ 1.5 trillion in their accounts, which will also begin to be spent as the economic situation improves. Most likely, this will also lead to the arrival of money in the cryptocurrency market.


From the point of view of technical analysis, the important support area of $ 43,000-44,000 has been maintained, which enables the "cue ball" to continue rising. However, the price of Bitcoin declined by $ 3000 today, which makes us think about a new round of correction. It can be recalled that no matter how many factors speak in favor of further growth of BTC, no asset in the world can become more expensive indefinitely.