Connect with us

Bitcoin

Bitcoin Correction Towards $40K Back in Focus as Rally Pauses

Published

on

Yashu Gola



Bitcoin lost steam on Wednesday, pausing a bull run that had accelerated on the backs of Tesla’s $1.5 billion investment and optimism over a massive stimulus package in the United States.

The benchmark cryptocurrency closed marginally higher by 0.14 percent on Tuesday, forming a Doji candle that shows an imminent bias conflict in the market. Today, during the Asian session, Bitcoin showed signs of bearish reversal (short-term) after dipping by more than 1 percent to hit an intraday low near $45,666.

At its highest, the cryptocurrency was trading at $48,200 in a follow-up to its 20 percent rise on Monday.

Bitcoin, cryptocurrency, BTCUSD, BTCUSDT

Bitcoin corrects modestly after hitting a record high above $48,000. Source: BTCUSD on TradingView.com

The reversal came despite the euphoria surrounding Tesla’s consideration of Bitcoin as an alternative to cash, a narrative that bulls had pushed for years. Also, US President Joe Biden’s pressure on Congress to pass a $1.9 trillion stimulus aid avoided offering tailwinds to the Bitcoin price rally.

Headwinds Appear, Nonetheless

In a note to investors, JPMorgan & Chase strategists led by Nikolaos Panigirtzoglou said Tesla’s bitcoin bet would not result in copycat investments from other major corporates. They argued that the cryptocurrency is still too volatile to replace cash as a store-of-value asset effectively.

Jerry Klein, managing director at New York-based investment management firm Treasury Partners, also noted Tesla’s move makes no sense. In an interview with the Financial Times, the Wall Street professional noted that corporates are willing to accept a low return rate via cash than to balloon their risks by investing in Bitcoin.

“I don’t think there is a case to be made for investing corporate cash in a risky asset like bitcoin, where they could experience significant declines.”

Meanwhile, many analysts within the cryptocurrency space expressed their risk-aversion bias towards Bitcoin, with independent technical chartist Kevin Cage hoping to see the price at $74,000 but still warning about a major downside pullback should the rally fail to mature.

“It won’t last forever, but I hope we get a few more months of PUMPS,” the analyst tweeted Wednesday.

Bitcoin at $40K?

A dissenting outlook over Tesla’s investment into the Bitcoin market appears to have counterbalanced the ongoing bullish euphoria. Traders typically use these periods to withdraw their profits and wait for another dip to repurchase the underlying asset.

For instance, after PayPal announced in October last year that it would enable bitcoin services on its platform, the cryptocurrency surged by over 60 percent within the next month—from $11,900 to $19,469. Nevertheless, it later underwent a 16.92 percent downside correction on profit-taking sentiment.

Bitcoin, cryptocurrency, BTCUSD, BTCUSDT

Comparing PayPal and Tesla Pump. Source: BTCUSD on TradingView.com

Bitcoin later bounced back after spotting a support level near its 20-day exponential moving average (the green wave in the chart above). The cryptocurrency stretched its rebound to a new all-time high just yesterday, led by Tesla. It could now attempt to undergo a similar, healthy correction towards the green wave. It sits near $40,000.





Source link

Bitcoin

Traders speculate that Bitcoin’s price may continue to trade sideways for now

Published

on

By

Cointelegraph By Benjamin Pirus

Bitcoin’s price has declined in recent days. While it has rebounded from its weekly lows, the asset’s trajectory remains uncertain says CryptoWendyO, a crypto trader on Twitter.  

“The daily timeframe is not looking great as we are having trouble sustaining $50K,” she told Cointelegraph on Friday. “I am feeling like we will get a run to $51.6[K].”

She added:

“From there I would be cautious as rejection could lead back to the $50K -$45K range. A break down there could be a swift wick to $42-38K with a glorious recovery. Invalidation would be a sustained consolidation at $52K.”

After hitting record highs of approximately $58,360 in February, Bitcoin (BTC) dropped down to roughly $43,015 in subsequent days, based on TradingView data. The asset then rebounded up to about $52,660, before continuing its downward price action below $50,000. Bitcoin is trading at roughly $49,020 at time of publication.

Cheds, a trader on Twitter holding his CMT level I certification, expects “more consolidation from BTC above that key 42k level,” he told Cointelegraph on Friday. He also tweeted a chart of his range expectations.

“The big question is if the recent 27% correction is enough to bring us to a new high,” Cheds said. “In the meantime we will watch a tightening range on the daily of lower highs and higher lows.”

A number of technology stocks have also suffered price decline recently.