In our recent articles, we said that bitcoin may well return to the level of $42,300, but this time it has exceeded the plan and is currently trading at $44,300 per coin. On the one hand, we did not expect such strong growth. On the other hand, we have repeatedly drawn the attention of traders to the fact that the bullish trend is considered complete, but this does not mean that bitcoin can no longer show growth. Or that it will only fall over the next two years. If you look at the charts of past bullish trends, it is perfectly clear that after that, bitcoin repeatedly showed segments of powerful growth even in the stage of correction and consolidation, which could last for several years. Accordingly, the current growth absolutely cannot be considered as the beginning of a new bullish trend. Simply put, bitcoin broke out of the expanding horizontal channel, overcame several important resistances, but this may be the so-called "bull trap". At this time, when many private and retail investors can believe in the new growth of bitcoin, powerful sell-offs from bigger players may follow, which will plunge bitcoin once again.
Of course, this is just a hypothesis and we always recommend trading exclusively on the trend, and not trying to guess the reversal in one direction or another. Thus, the main conclusion now is this: there is an upward trend (it is especially clearly visible on the 4-hour timeframe), so you should buy bitcoin. But at the same time, you should also keep in mind the idea that there are no fundamental reasons for the new growth of the number one cryptocurrency in the world. That is, on the basis of what bitcoin has risen in price by almost $15,000 over the past few weeks? Because Elon Musk and Jack Dorsey spoke flatteringly about it? What other reasons were there? From our point of view, none. Of course, bitcoin can grow without a foundation, but still we are trying to find logical patterns in the cryptocurrency's movement, and not just guess its movement. Thus, from our point of view, bitcoin is now still preparing for a new powerful fall. It just went a little further up than we expected. Therefore, we expect a new round of downward movement, and from America - we expect news about the tightening of cryptocurrency circulation and tax legislation related to digital assets. And these factors can put real pressure on the entire cryptocurrency market.
Technically, bitcoin has settled above the expanding horizontal channel on the 24-hour timeframe. This suggests that quotes may continue to rise, however, we believe that this is a false breakout. At the moment, the price has reached the level of $43,852, which is also an important resistance, but on the current timeframe it has not gone beyond this level. Thus, it is of great importance where the current day will close. We also pay attention to the 4-hour timeframe (will be discussed in detail in the next article), on which there is a rising trend line, the breakthrough of which may just signal the beginning of a new round of the downward movement.
The material has been provided by InstaForex Company - www.instaforex.com