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It's been another week since our last article, and then this opportunity turned up to buy off the cryptocurrency on a drawdown and earn 10-20-30% in a few days, I hope you did not miss this moment.
Let's start with the fact that the correction was brewing, and even in the previous review of April 14, I hinted that it is worth partially fixing profits and buying back on drawdowns since this strategy can balance your trading deposit and allow you to increase the asset.
The cause and effect of the correction have quite a lot of factors: local overheating of long positions; speculation against the background of fixing the excess income from investments in Coinbase; Turkish restrictive measures; US President Joe Biden's plans to increase the capital gains tax for the rich almost twice; the accident at the Xinjiang coal mine, which caused power outages in all mines, which led to a decrease in the hash rate of the entire network by about 21.56%.
Such a large amount of information put enough pressure on the market, which led to a full-size correction:
Bitcoin -25%.
Ethereum -18%.
The panic against the background of the "collapse" of the crypto market overcame many traders. Only experienced crypto enthusiasts and large players steadfastly followed the previously set strategy, which made it possible to buy off the cryptocurrency with a very good discount.
Since April 26, the crypto market has completed a series of descending candles, where hungry buyers have returned, collecting trading volumes from the market at the market price.
The complex of information flow played in favor of the growth of the crypto market:
American financial holding JP Morgan, considered one of the most influential players on Wall Street, will open access to Bitcoin for some clients through the BTC hedge fund they created.
According to rumors, the investment instrument will be launched in the summer of 2021.
In simple words, one of the largest Wall Street players will open up the flow to new institutional investors, which can lead to even greater confidence in the reliability of the new asset, as well as give growth to the entire crypto industry.
The second factor may seem dangerous for the cryptocurrency, but it is not. According to the report for the first quarter, Tesla sold BTC for $272 million. The balance after the sale is still at least $1.33 billion.
"Bitcoin has proven to be a good solution for storing funds that are not immediately required for everyday operations and can bring good profits. We continue to accumulate BTC for the purchase of our cars," the company said.
Selling bitcoin in large quantities for the crypto market is always considered a negative factor, but when one of the largest companies in the world declares that bitcoin is a good solution for storing and using money, it is a success.
Elon Musk wrote on Twitter that he has not sold any of his bitcoin, and Tesla has sold 10% of its assets in BTC to show its liquidity as an alternative to assets in the cache.
The lever for the cryptocurrency is completely due to the information noise.
Now we understand in general terms the corrective course, as well as the turn of the upward course, which is still at the very beginning of its path.
Not only the influx of institutional investors but also the adaptation of cryptocurrency in society can be considered a positive call for the entire crypto industry.
The CEO of the largest debit electronic payment system PayPal said that their company has been studying and waiting for cryptocurrencies to gain more popularity for more than six years. In fact, this was their strategic move, and after PayPal added support for cryptocurrencies for US users in October 2020, the demand for cryptocurrencies was simply overwhelming. The head of PayPal suggests that in the next ten years, the financial system will undergo significant changes, as these structures have lost their effectiveness. In the near future, payments will be dominated by up to ten "super applications", and credit cards will eventually disappear, they will be replaced by mobile phones.
As long as you criticize and deny the impact of the crypto industry on the financial world, the future is changing, we need to keep up with the times.
2012 - BTC at $5 is already very expensive!
2014 - BTC at $600 is already very expensive!
2016 - BTC at $960 is already very expensive!
2018 - BTC at $10,000 is already very expensive!
2020 - BTC at $28,000 is already very expensive!
2021 - BTC at $50,000 is already too expensive?
What is happening in the market?
Bitcoin has gained more than 10% over the past trading day, which may seem like a strong price change, but this is just the beginning of a long journey.
Now many major players are increasing the volume of BTC in their portfolios, soon we will hear loud news that the funds made purchases in the region of $48,000-$58,000, and after that, the hamsters will come to the market, but there will be no discount.
The prospect of price development, as before, has a horizon of $100,000 for 1BTC, but in order not to scare you so much with such large numbers, for the beginning of the crypto train goes towards the values of $60,000–$65,000. These coordinates with a positive information noise can be reached in the period of 1.5-2.0 weeks.
As for Ethereum, please note that it did not weaken so much during the correction, and with the current recovery, only a few percent remained before the ATH update. The prospect for Ethereum, as before, is $3,000 for 1ETH, with a possible extension to $3,500. These expectations have a short-term forecast form.
Bitcoin Longs vs Shorts:
Longs (95.94%): $1,626,360,258
Shorts (4.06%): $68,798,940
General background of the crypto market
Analyzing the total market capitalization of the crypto industry, we see that during the correction period, the market sank by more than $540 billion, but more than half of this reduction has already been won back.
Total Market is currently $2.060 trillion.
The maximum level of the Total Market is $2.275 trillion.
Bitcoin holds the dominant position in the market by 49.5% of the Total Market, which is equivalent to $1,149,135,645,828 in numerical terms.
It is worth noting that the dominant share of BTC is constantly decreasing, which indicates that the alt season is actively underway.
The index of emotions (aka fear and greed) of the crypto market on April 26 dropped to the level of 27 points, this is the area of May 2020. In simple words, panic raged in the market, but there is an assumption that all this was manipulated by the big players. At the moment, the index is 50 points and continues to grow.
Indicator Analysis - BTC
Analyzing different sectors of time frames (TF), it can be seen that the indicators of technical instruments on the hourly period are actively working in the recovery process, signaling a buy, while the daily period has a delayed signal. The weekly period invariably follows an upward trend path, signaling a buy.
InstaForex analytical reviews will make you fully aware of market trends! Being an InstaForex client, you are provided with a large number of free services for efficient trading.
