During the last few weeks, Bitcoin has plummeted several times. It all started in El Salvador, where the government's decision to make bitcoin a legal means of payment caused mass riots and protests. This ended (for now) with a complete ban of China on any cryptocurrency operations on its territory. From our point of view, only what should happen is happening. Firstly, Bitcoin is still on the path of its formation. If we assume that it will not disappear over time (and it is almost impossible to imagine such an option now), then at the moment the cryptocurrency is only about 10-15 years old. Such a period is very small in the context of the formation of a new financial instrument. Therefore, Bitcoin can grow up to $ 100,000 per coin, and up to $ 250,000 per coin in the future. This is indeed the case. However, the main digital asset cannot grow constantly, so there should also be pullbacks and declines. Secondly, as already mentioned, Bitcoin's "bullish" trend can be completed near the highs of the current year, and even the growth to the level of $ 52,000 is not evidence of the opposite. Thus, we believe that the correction scenario remains a higher priority. In the near future, Bitcoin may rush to the level of $ 31,100 again.
It is also worth noting that one should not trade cryptocurrency without technical signals. For example, Bitcoin currently remains in a narrowing triangle, which is formed by the support level of $ 40,746 (from which the price rebounded 4 times already in the last week), as well as a downward trend line. Therefore, a lot will depend on which of these lines traders will be able to break through. So far, it can be concluded that pending buy orders are set around the level of $ 40,746. As soon as the price drops to this level, the demand for Bitcoin rises, and the cryptocurrency rebounds upward. However, will major players ultimately be able to keep the cryptocurrency above this level?
The fact that most of the forecasts for Bitcoin's future value depend on its recent movements should also be noted. For example, when Bitcoin rises, a bunch of predictions immediately appear, indicating that the cryptocurrency has headed for $ 75,000 or $ 100,000. As soon as Bitcoin starts to plunge, many experts immediately begin to predict its further decline. For example, Anzhey Kovalchuk, TomiEx's chief strategist for cryptocurrencies, believes that Bitcoin will soon fall to $ 30,000 amid a complete ban on cryptocurrencies in China. According to Kovalchuk, this is not a speculative drawdown of the instrument, which the market will quickly and easily buy out. However, in reality, it shows that the market is buying a drawdown near the level of $ 40,746 and has done this at least four times over the past week. In this case, we are really waiting for the breakdown of one of the sides of the triangle.
There is still a downward trend in the four-hour timeframe. Bitcoin declined to the support level of $ 40,746 four times and rebounded each time. Along with this, the price also failed to consolidate above the Ichimoku cloud and above the trend line. Therefore, it cannot be said that the bears are currently weak. If the trend line is broken, it is suggested to buy Bitcoin with the targets of $ 46,600 and $ 51,350. But if the level of $ 40,746 is broken, then the decline may continue to the level of $ 31,100.The material has been provided by InstaForex Company - www.instaforex.com