Bitcoin has worked out the important level of $40,700 and is now trying to decide what to do next. A lot will now depend on the belief or disbelief of the majority of market participants in the ability of bitcoin to continue growing. Indirectly, the fact that about 14,000 bitcoins were withdrawn from the Binance exchange on July 27, and another 30,000 were withdrawn on July 28, speaks in favor of a new drop in bitcoin. In total, all the bitcoins sold are worth about $1.6 billion. These are serious figures for the exchange rate of the main cryptocurrency, as they can provoke an avalanche effect. Such large sales of bitcoins indicate that not all market participants believe in the continuation of the growth of bitcoin. Consequently, other owners may follow the example of unknown investors. It is also noteworthy that large sales of bitcoin occurred when the price of the cryptocurrency itself came close to the level of $40,700. It is with the achievement of this level that the closing of long positions can be associated. However, experts also say that the outflow of users may be associated with the new rules of the exchange, according to which the daily limit on the withdrawal of bitcoins was lowered. Stricter rules were introduced for unverified users, so investors could simply leave Binance in favor of other cryptocurrency exchanges.
Also, not the most rosy news came from the head of Mobius Capital Partners, well-known investor Mark Mobius. In an interview with Bloomberg, he said that governments are increasing pressure on the cryptocurrency industry, and the law may eventually defeat bitcoin. Thus, the current situation may be a temporary surge of optimism before a new collapse. According to Mark Mobius, many companies and individual investors may now rush to make money on bitcoin before governments (in particular the United States) tighten the rules for regulating the cryptocurrency sphere even more. When this happens, black times may come for all cryptocurrencies. Mobius also voiced the idea that we have already said many times. According to the investor, a high interest in bitcoin is maintained due to numerous incentive programs that increase the amount of money to people. Thus, when the incentive programs are completed, it will be very difficult for bitcoin to generate new demand.
Technically, on the 4-hour timeframe, bitcoin quotes continue an upward trend inside the side channel of $29,700 - $40,700. And at the moment, we have worked out the upper limit of this channel. Thus, the future fate of the cryptocurrency will be decided around the level of $40,700. We believe that after such a strong growth, which is not too justified by fundamental factors, a new decline to the level of $29,700 will follow. But in the case of overcoming $40,700, the upward movement may continue, and traders will be able to buy bitcoin with a target of $43,852.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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