18.08.202115:12 Forex Analysis & Reviews: Bitcoin is at risk of falling dramatically

Bitcoin once again failed to break through the resistance of $47,800, which led to the formation of a downward correction for the trading instrument. However, while the fundamental background is quite calm, and none of the central banks and governments are going to act aggressively against the ban on digital currencies, we can expect a gradual recovery of the bitcoin exchange rate, since consolidation above the 200-day moving average is a fairly powerful bullish signal. However, it is very dangerous to trade so close to it, so buyers of bitcoin need to continue the bullish trend as soon as possible, otherwise, it will not be very good. But we will talk about the technical picture below.

I would like to note that more and more world-famous companies are interested in specialists in the field of cryptocurrencies. Recently, Walmart Inc. announced that it is looking for a cryptocurrency specialist to develop a blockchain strategy and thereby joined the growing number of large corporations studying the viability of digital currencies. According to the vacancy announcement, this position will be responsible for "developing a digital currency strategy and a roadmap for a new product," as well as determining a strategy for investing in cryptocurrencies. Walmart does not talk about specific requirements for the applicant, but the vacancy also mentions the possible expansion of payment options for its customers on the Internet, which is very good news for the cryptocurrency industry. Let me remind you that a few weeks ago, the company Amazon.com Inc. has published an almost similar announcement, which indicates that the largest retailers in the United States may soon allow customers to use cryptocurrency to pay for their purchases. Back in the spring of this year, PayPal Holdings Inc. developed the Venmo application, through which users of the service can buy, sell and store digital currencies.

As for the technical picture of bitcoin, it seems that the test of the $47,800 level does not yet attract new big players who are waiting for an answer to the question: will bitcoin be able to consolidate normally above the 200-day moving average or not. At the moment, it is just around the $45,200 level, to which BTC has descended after unsuccessful tests of $47,800. A sharp drop below this level will provoke the demolition of a number of stop orders of the bulls, so now we need to pay attention to what is happening. A breakdown of the support of $43,100 will collapse the trading instrument to the lows of $38,100 and $33,800, which will be a complete collapse for buyers who expect an instant return and consolidation above the 200-day moving average, which big players use to determine the medium-term direction of the market. If we see a breakout of the resistance of 47,800, then we can expect more active purchases in the area of the highs of $52,000 and $58,000.

I would also like to say a few words about the little-known digital token Cardano, which yesterday became the third largest digital currency in the world. The boom associated with decentralized finance allows Cardano to gain more and more popularity. Most recently, the ADA cryptocurrency has jumped by about 50%, and optimism about it is only growing. New technological improvements will allow the use of Cardano smart contracts to offer services in the field of DeFi, which is currently dominated by Ethereum. Considering how DeFi broke into the market this year, we can predict a good potential for the development of this technology in the future, which will lead to an increase in the price of the token regardless of the direction of bitcoin and the entire cryptocurrency market in general. The ADA token now has a market value of more than $69 billion – more than all of its competitors, except Bitcoin and Ether.

However, there are also skeptics about the development of this direction. Galaxy Digital LP CEO Mike Novogratz recently wrote that he spoke with twenty of the smartest people he knows in this field, and none of them saw Cardano in serious demand among developers. It is quite likely that this is done in order to test the stability of the market after such a sharp jump of 100% over the past six months. If we do not see any active and sharp decline in the near future, and the negative attitude towards ADA is ignored further, this will become a strong bullish signal. Cardano has almost returned to its May all-time highs, when the cryptocurrency market was at its historical peak. The first support levels are seen in the area of 1.81 and 1.64. A break of 2.15 will lead to a larger upward movement with an exit to the highs of 2.32 and 2.46.