Bitcoin has grown by $16,000 over the past few weeks. However, such an impressive growth was practically not fueled by the fundamental background. So far, everything looks as if market participants are in a hurry to buy bitcoin not at minimum prices, but until the moment when new legislation will be adopted in the United States, which will provide for stricter regulation of the cryptocurrency segment. In other words, almost any operation related to cryptocurrencies will come to the attention of the Tax Administration if the new bill is passed by congressmen. After this happens, bitcoin will become less profitable to buy. We can link the current growth of the quotes of the main cryptocurrency only with this moment. But there is still little positive news for "digital gold". Yesterday, it became known that China is going to continue to tighten regulatory pressure on companies that are somehow connected with cryptocurrencies. The Central Committee of the Communist Party of China (CCCPC) and the State Council of the People's Republic of China have published a five-year plan that will be aimed at strengthening the regulation of the sphere of national security and various technologies. It is reported that over the next three years, the Chinese government is going to adopt a number of different acts and laws that are related to companies that are engaged in technologies, innovations, data processing, and more. In particular, related to the environment. The document does not directly mention cryptocurrencies and blockchain, but the improvement of the environment clearly implies that the ban on mining will not be temporary. The Chinese authorities will also seek to improve the areas of Internet finance, artificial intelligence, data processing, and cloud services. Thus, although not a direct impact, this news also affects the prospects of bitcoin, particularly, in China.
Also, the whole world continues to wait for the final decision of the US Congress on the bill, which concerns the "infrastructure package". It is in this document that the definition of the concept of "broker" is contained, which, according to the current text, applies to almost any participant in the cryptocurrency market. In general, from our point of view, the fundamental background for bitcoin is only getting worse, so we continue to expect it to fall, but you should be reminded that the cryptocurrency is very much dependent on the faith of market participants in its future growth. So far, this belief is strong, but there is always a technical analysis that helps to understand the current mood of the market.
Technically, bitcoin continues to be in an upward movement on the daily timeframe and has reached the level of $46,600. There was a pullback down yesterday, but, as can be clearly seen in the illustration above, the price failed to reach either the trend line or the Ichimoku cloud. Therefore, the upward trend is currently continuing, and the cryptocurrency may make another attempt to reach the level of $47,500. It will be possible to talk about a new drop of bitcoin no earlier than the consolidation of quotes below the ascending trend line.The material has been provided by InstaForex Company - www.instaforex.com