InstaForex

November 26, 2021

India is not to blame as BTC needs a serious correction

 In the article yesterday, we looked into the 24-hour chart on Bitcoin and made a conclusion that the flagship crypto could extend its slide and shed another $3-6,000. The key levels on the daily timeframe are Senkou Span B of Ishimoku indicator as well the trendline. These two obstacles do not allow Bitcoin to drop lower, thus enabling it to sustain the overall bullish trend. Nevertheless, let me turn your attention to the fact that large investors are not able to save Bitcoin from falling all the time. What is going on now? As soon as Bitcoin approaches the important support level, large market players and institutional investors rush to buy all available tokens in the market that revives the uptrend. The question is how long the market is going to operate this way. Perhaps until all token will be purchased by several billionaires and investment funds?


The picture is more interesting on the 4-hour timeframe. First, we can see that the downtrend is already underway. After Bitcoin price had settled below the downward channel, the crypto began a powerful move. At the moment, the price has got stuck at $55,754. A further trajectory will depend on whether the price will be able to overcome it or not. However, I want you to scrutinize the whole section of the downtrend. Obviously, it consists of 5 waves. Commonly, waves are of secondary importance to me. Now we see the wave structure like in a learning book. Therefore, after a small upward correction, the crypto could take a sharp nosedive.


India mulling over ban on crypto markets, but this is not market catalyst now


Yesterday, mass media and experts wrote that the underlying reason behind the current Bitcoin's decline is a new bill in India that might ban the use of all cryptocurrencies across the country. The bill has not been signed into law yet, but this could happen soon. India's authorities consider Bitcoin and other altcoins could be easily prohibited. This is the common practice nowadays. People are attracted to Bitcoin to evade taxes, hide their income, fund terrorism, and criminals. However, from my viewpoint, even if India follows China's example and clamps down on digital tokens, this action will hardly affect Bitcoin's value. In China, there is a cluster of powerful mining facilities which consume the largest energy resource in the world. Things are different about India. Indeed, there are some mining firms in the country that will have to abandon their homeland for the sake of earnings. Besides, a number of crypto exchanges and crypto payment firms will also wind up. This cannot deal a devastating blow to the crypto industry because this crackdown is not as powerful as in China. Actually, Bitcoin might be knocked down for a day but a recovery will follow shortly after.


On the 4-hour chart, the flagship cryptocurrency is trading lower unlike the 24-hour chart. At present, Bitcoin has failed to overcome the level of $55,754 and have made three bounces. On the other hand, the crypto has not been able to settle above $57,652. All in all, the digital token has been trapped in a narrow trading range. The price is likely to follow the direction in which it will exit the range.