Bitcoin is still tending to grow and is again approaching all-time highs - Kakiforex | Forex markets for the smart money. Bitcoin is still tending to grow and is again approaching all-time highs Bitcoin is still tending to grow and is again approaching all-time highs

May 3, 2021

Bitcoin is still tending to grow and is again approaching all-time highs

 On Sunday, the first cryptocurrency moved slightly away from the 61.8% Fibonacci level - $58,000. But on Monday, it returned to the level again and is currently trying to overcome it. Thus, there was no good rebound from this level, which means that the chances of further growth in bitcoin quotes are increasing. Even though the quotes have overcome both the 50.0% Fibonacci level and the critical Kijun-sen line, the whole picture still looks as if the correction is about to resume.


This is supported by several factors: First, the upward trend was clearly slowing down recently, which means that it needed a new impetus to not just resume, but also to resume with renewed vigor. In order to do this, we need an influx of new investors or investments. Secondly, the fundamental background of recent weeks was clearly not in favor of bitcoin. In fact, the only positive news is the activity of MicroStrategy, which continues to invest in bitcoin instead of developing software. Third, bitcoin has been growing for more than a year and has grown from $4,000 to $63,000 during this time. It is true that it can grow theoretically as long as there is a demand for it, but there is still a limit to everything. However, it should also be noted that the global factor of pumping the American economy with money also works in the cryptocurrency market. And if in the foreign exchange market it plays against the dollar, then in the crypto market it plays in favor of bitcoin and any other cryptocurrencies.


The logic is banal and simple – there is more and more money in the economy, which means that the dollar will depreciate over time. But in any case, this money is already there and, therefore, one must spend it somewhere. It is the inflated money supply that explains the records of the last year on the stock market, as well as the crazy growth of the cryptocurrency market. Thus, since the US government and the Fed continue to pump the economy with hundreds of billions and trillions of dollars, this money may continue to settle on the cryptocurrency and stock markets. This means that bitcoin can continue to grow in the long term, which is much more important. Thus, we recommend that you continue to rely on the technical analysis when making trading decisions, which most quickly responds to any changes in the market sentiment. It should also be noted that bitcoin is becoming less popular among investors. For example, Ethereum regularly grows and updates its own highs in the last month or two, unlike bitcoin. The bitcoin dominance index continues to decline.


In technical terms, bitcoin has grown to the 61.8% Fibonacci level and is lingering around it for the third day. So far, the further growth of "digital gold" is still not obvious, given the lack of a supporting fundamental background and the technical exit of quotes beyond the ascending channel. At the moment, even if we consider the growth of bitcoin in recent days by 11.5 thousand dollars, we still believe that there is a greater probability of a fall. Nevertheless, it should be recognized that the chances of resuming the correction are still decreasing every day.