InstaForex

July 6, 2021

Bitcoin continues to gravitate towards the fall

 Over the past two months since Bitcoin first collapsed to the level of $30,000 per coin, the cryptocurrency has tried to continue falling below this level 4 more times, and also tried to resume the upward movement two or three times. But as a result, a very clear and accurate sideways channel was formed, which is limited to the levels of $31,100 and $40,700. It is from the boundaries of this channel that bitcoin quotes have bounced off in the last one and a half to two months. For the last two weeks, Bitcoin has been in a very weak movement, not even approaching the borders of the side channel. Thus, it is now the time to talk about a full-fledged flat. In recent months, it has been repeatedly stated that the corrective scenario remains more likely to be executed.


After negative news began to arrive from China, Turkey, India, and the United States, bitcoin is constantly under pressure from the market. Simply put, those who want to sell bitcoin while it is still afloat are much more than those who want to buy it and keep it on their balance for at least several years. The problem now is that the cryptocurrency market is under the threat of a serious tightening of regulation by a number of countries, in particular China and the United States. Moreover, there has never been any positive news for Bitcoin. Earlier, Elon Musk regularly pushed up quotes, but now he has clearly switched to other cryptocurrencies. The long-standing question is how long will the market follow Elon Musk's manipulations? But let's get back to Bitcoin. After all, it is important for us to understand what to expect from it in the future. According to a recent CNBC poll, the majority of executives surveyed believe Bitcoin will end 2021 below the $30,000 mark, and this option was supported by 44%. Meanwhile, about 25% voted for the $40,000 option, while another 25% chose the $50,000 option. Thus, oddly enough, a fairly large proportion of investment managers believe that Bitcoin may show growth in the second half of 2021.


At the same time, the largest British bank Barclays prohibited its clients from transferring funds to the Binance cryptocurrency exchange, which is one of the largest in the world. The bank representatives explained this decision by the fact that they want to help keep their clients their funds. Earlier, the UK Financial Conduct Authority banned Binance from carrying out any activity in the country without prior written approval. At the same time, the Swiss financial holding UBS also began warning its clients about the possibility of losing all their money trading cryptocurrencies. UBS warned that cryptocurrencies are not an investment tool in the truest sense of the word, as the bubble in the cryptocurrency market could collapse at any time. UBS noted the pressure of regulators on the cryptocurrency market, as well as the price volatility of cryptocurrencies. "Regulators have demonstrated they can and will crack down on crypto," said UBS in a statement. "So we suggest investors stay clear, and build their portfolio around less risky assets."


Technically, Bitcoin fell to the $31,100 support level five times and bounced off it five times. Formally, the price turned up again and is likely to continue a new round of movement to the upper border of the side channel - the level of $40,700. However, Bitcoin has been aiming to break the $31,100 level for several weeks now, and we believe that this will happen sooner or later. And the consolidation of quotes below the level of $31,100 may signal the readiness of the cryptocurrency for a new fall. Many crypto experts are in favor of the main cryptocurrency continuing to fall in price and may fall to $19,000 - $24,000 per coin. And some even call the figure $10,000.


The 4 hours chart also has a great benchmark to help traders in the near future. This reference point is the trend line, which already has three pivot points. In addition, the bitcoin quotes almost ideally bounced off the Senkou Span B line twice. Therefore, the consolidation of quotes below the trend line can provoke a new movement down to the levels of $31,100 and $29,700. In this case, we recommend selling Bitcoin.