28.02.202114:42 Forex Analysis & Reviews: $ 44,000 per coin – a critical level for bitcoin

Exchange Rates 28.02.2021 analysis

After the strongest growth in the last five months, bitcoin has started a second serious wave of correction. In theory, if the current downward movement is a correction, then a new wave of upward movement will inevitably follow, which can bring the "digital gold" to the levels of about $ 70-80 thousand per coin. However, we draw the attention of traders to the fact that the market is not showing signs of readiness for new purchases. Perhaps traders are waiting for a new decline to buy at an even better price, and perhaps the markets are waiting for some kind of push that will tell them what to do next. The price hovered near the critical Kijun-sen line and most experts agree that the zone of $ 44-45 thousand per coin is the key for the "cue ball". If the price falls below this area, then, most likely, a new wave of sales of "digital gold" will follow. Therefore, we recommend that traders keep a very close eye on this area. It should be recalled that no matter what forecasts are given by experts, there is always a probability of a move in the other direction. Back in 2017, many people were talking about $ 50,000 per coin, but later the "cue ball" rate collapsed from $ 20,000 to $ 3,000.

At the same time, large investment and management companies openly state that they could deal with bitcoin if its volatility was lower. Companies also want to see the liquidity in bitcoin and clearly understand the relationship between cryptocurrencies and regulators in the future. The question of the legality and control of transactions with bitcoin is really in the air. Representatives of the Federal Reserve and the ECB (as well as other central banks) have repeatedly stated their skepticism about tokens that are not controlled by anything and no one. Thus, it is easy to guess that regulators would like to establish control over "digital currencies" or depopularize them as much as possible. It is this uncertainty in the relationship between tokens and governments that makes many investment funds and investment banks cautious. Some of them admit that bitcoin can be part of the investment portfolio, but in the proportion of no more than 1%. Rebecca Patterson, the chief analyst at Bridgewater Associates, believes that the current bitcoin movements of 10% per day, which depend on a single tweet, are 10 times higher than the volatility of the US dollar. "More stringent oversight of cryptocurrencies on the part of the States will give more comfort to investors. This will provide liquidity and reduce volatility. Perhaps this is what needs to happen in the first place," said Patterson. Perhaps bitcoin has reached its maximum value at the current level of popularity?

*Analiza tržišta koja se ovde nalazi namenjena je boljem razumevanju tržišta i ne pruža instrukcije za vršenje trgovanja.

Paolo Greco,
Analitickog eksperta
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