Bitcoin continued its upward movement this weekend, but at the same time, it clearly lacks new fundamental reasons to continue this very rise. Simply put, despite breaking the important 61.8% Fibonacci level on the daily time frame, bitcoin's upward trend seems unlikely to continue. One gets the impression that the bulls are pulling bitcoin upward with their last bit of strength, but sooner or later they will miss it. The chart below clearly shows that the new short-term upward trend for bitcoin is drying up in the same way as the long-term trend (on the daily TF) was drying up a couple of months ago. Thus, a new round of downward movement may begin soon, despite all the forecasts of $100,000 in 2021.
Meanwhile, Tesla and Space X CEO Elon Musk urged everyone to invest in cryptocurrencies with caution. "Cryptocurrencies are promising, but please invest with caution," he tweeted. Recall that earlier, Musk repeatedly commented on various cryptocurrencies, which constantly provoked an increase in their value. At the same time, Musk has repeatedly called for caution in investing in digital assets. The Bank of England and its governor Andrew Bailey also warn about the danger. According to Bailey, cryptocurrencies have no intrinsic value, so investing and trading them pose a serious risk of losing all funds. He also added that such excitement in the cryptocurrency market is associated only with the "external value" of these assets.
Bailey recommends investing in cryptocurrencies only if you are willing to lose all your money. But while central banks warn, commercial banks continue to incorporate bitcoin into their operations. For example, according to the latest information, the financial giant Citigroup is going to launch the ability to trade cryptocurrencies and provide the ability to store them. According to the head of the bank's foreign exchange operations department, Itai Takman, since August 2020, their clients are actively interested in bitcoin, so the bank decided to provide them with the opportunity to trade cryptocurrencies, as well as provide new services and useful tools for the cryptocurrency sector.
Technically, bitcoin continues to be in an upward trend on the 4-hour time frame, but a slowdown in the upward movement is visible to the naked eye. The trend line clearly shows that at the moment the upward trend persists, however, if the price fixes below it, it will mean a new round of downward correction. We still believe that the corrective scenario for bitcoin is more logical at this time. However, we remind you that any fundamental theory must be confirmed by specific technical signals. Thus, to sell bitcoin, you need to wait until the trendline is crossed.
