Bitcoin is recovering quickly, but this doesn't mean anything - Kakiforex.com - Financial Market Media No. 1 in the World Bitcoin is recovering quickly, but this doesn't mean anything Bitcoin is recovering quickly, but this doesn't mean anything
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May 21, 2021

Bitcoin is recovering quickly, but this doesn't mean anything

 Yesterday, when bitcoin was still trading at $40,000 per coin or so, we said that the cryptocurrency can now sink to the $30,500 mark. And just a few hours later, this forecast was fully confirmed. The avalanche-like fall of the first cryptocurrency in the world ended just around the level of $30,500 with a minimum in the region of $29,500. After that, an equally strong recovery began, as a result of which bitcoin managed to win back about $10,000 of losses in less than a day. Ergo, there was a rebound from the level of $30,500 and now it may seem that the cryptocurrency is ready for new achievements and will resume the upward trend. However, we should not jump to conclusions. Studying similar periods of decline in 2013 and 2017, it is possible to make an almost unambiguous conclusion: during the decline in bitcoin quotes by 80-90% after strong upward trends, strong bullish candles were repeatedly observed. That is, as bitcoin once again plunged into the abyss, buyers sought to save it, but in the end, nothing came of it twice. In principle, it is even logical that around the strong support level of $30,500, which is one of the past local lows, a certain part of traders and investors began to buy bitcoin again. Still, even for bitcoin, it is impossible to fall by 80-90% in a few days. Thus, after it has already fallen by $13.5 thousand per day, it would be naive to expect that it will immediately fall by another 10-15 thousand. So, a completely natural upward pullback began. However, the most important thing to understand now is whether institutions and large investors are going to continue their investment in bitcoin after it has lost more than 50% of its value? Yes, the cryptocurrency has returned to the level of $40,000 per coin now, but many investors who bought "digital gold" in recent months are now at a loss. And in order to offset these losses, we need new investors and investments. And how do we convince new investors or even themselves of the feasibility of buying bitcoin, if the cryptocurrency has lost more than half of its value in less than a month? In general, despite the recovery, the days of determining its future are really hard for bitcoin. If the markets once again believe in it, then the upward trend can be restored. But we are still inclined to the point of view that the cryptocurrency will now become cheaper in the long term. Recall that this is not only because of the mass sales by investors, but it is also the fact that the fundamental background of the last month was clearly not in favor of the first cryptocurrency. And at this point, we can't conclude that anything has changed. Moreover, the market received information that many investors are now transferring their assets from unstable and high-risk bitcoin to classic gold. If so, the process of capital outflow from the Bitcoin network to alternative cryptocurrencies and investment tools can be continued.


Technically, bitcoin fell to the support level of $30,500, and at the same time to the support level of $29,873. Thus, all corrective targets were worked out perfectly. At the moment, the upward rollback has begun and the rate may well recover in the next few days to $45,000. But, from our point of view, it will be very difficult for it to continue to grow above this mark.