07.05.202115:35 Forex Analysis & Reviews: Prerequisites for bitcoin's new growth cycle have appeared

The last few weeks have been really tough for the first cryptocurrency. After reaching another maximum, the asset slipped to $60,000, from where a rapid decline began due to the market correction, exacerbated by negative news and technical problems of the cryptocurrency. Over the past week, Bitcoin continues to be in uncertainty and fluctuates between $53,000-$56,000.

The main reason for bitcoin's lack of rapid growth is its oversupply in the market, as well as an unhealthy ratio of long futures positions. Most large companies that previously gave bitcoin the necessary margin of safety, use the asset against itself. Institutions buy coins and fix profits in them, which puts significant pressure on the growth of quotes. At the same time, this factor is beginning to lose its relevance due to a significant decrease in the number of bitcoins on cryptocurrency exchanges recently.

This can ease the pressure on the BTC metrics that sellers are organizing. In a favorable prospect, this will become an opportunity for the cryptocurrency to overcome the $58,000 mark and retest the $60,000 mark, from where to start a new stage of growth. It should be noted that the situation around the cryptocurrency market and specifically bitcoin is most conducive to an attempt to start growth. Galaxy Digital is set to complete its acquisition of BitGo in the fourth quarter of 2021 for $1.2 billion. Recall that this fund, among other things, provides services for the trust management of cryptocurrencies. Also, payment systems software company Square announced a 220% increase in profits thanks to the purchase of bitcoins.

A significant positive to the cryptocurrency market was brought by world banks, which are also going to expand interaction with BTC. For example, Goldman Sachs announced the launch of a new financial instrument based on bitcoin. The algorithm assumes that the bank's clients make money on fluctuations in the exchange rate of the coin. At the same time, the profit will be fixed in fiat, which will be an excellent argument for more traditional audiences to join the market. Another bank, Citigroup, has recognized the growing interest of its clients in bitcoin and therefore is considering launching cryptocurrency services for transactions with digital coins. And the cherry on top was the announcement of the insurance company Metromile, which will be the first in history to pay insurance in bitcoins. In addition, mining processes have fully recovered, which was announced by the American company Big Digital.

Despite all the positive and prerequisites for a retest of $60,000, bitcoin continues to fluctuate in a narrow corridor. As of 11:00 UTC, BTC/USD is quoted at $56,000. It should be noted that at the same time, the daily trading volumes are rapidly increasing and are already approaching the $90 billion mark. This may indicate another attempt to start growth and cross the psychological mark. However, it should be understood that the bitcoin correction and market pressure have not disappeared, and another defeat at the turn of $60,000 may cause a total sale that will affect the entire market. An important aspect that can save the market from such an outcome is the approach of the weekend. Some of the market pressure will disappear and bitcoin will receive a small corridor for the next retest, which may end positively. Taking into account all the above factors, you can count on the breakout of the $60,000 mark and the beginning of a bullish trend.

Exchange Rates 07.05.2021 analysis

Artem Petrenko,
Analitickog eksperta
InstaForex grupa kompanija © 2007-2021
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