What’s going on with bitcoin?

This is the latest bitcoin market analysis for the winter of 2020-2021, which has been phenomenal for BTC. On December 1, 2020, the exchange rate was 19700. As of this writing at the end of February 2021 – the coin is trading around $46,000, which is about +150%. Impressive!

What’s next? In their latest recommendation, JPMorgan analysts advise clients to hold about 1% of assets in bitcoin. They point out the lack of available coins due to growing demand from institutional investors. Among many others, the cryptocurrency has been invested in:
-Grayscale fund
-Tesla (invested 1.5 billion)
-legendary investor Paul Tudor Jones
-MicroStrategy, a for-profit company, owns over 90,000 bitcoins

Given the above positive facts, the recent sharp drop in BTCUSD from a record high of about $58,000 reached on February 21 is troubling. What could it mean?

Let’s turn to the chart for an answer.


Note the behavior of the price before taking the key levels of $20,000 and $40,000 per coin.

The sharp decline on November 26.
There were three sharp declines on January 11, 21, and 27.

Each time the trading volume was at high levels, but with different dynamics, the price invariably recovered and eventually overcame the key level.

Probably, this way the “invisible hand of the market clears the way for further growth. Because seeing a sharp fall, traders who want to sell large lots at around level (for example, 20 and 40 thousand) are frightened by the rapid fall and hurry to sell the coins as quickly as possible, before the price drops even lower. Thus the resistance of the key level goes lighter. We assume that the sharp descending bars of February 22-23 (3) may have the same motive. Thus we have reason to expect a buyers’ attack on the next key level of 60,000.

That’s not to say that a violent rise is going to happen in the next few days or even a week. But pay attention to the uptrend channel lines (4). Technically, the bullish trend is not yet broken. And as long as it is, upside trading should be preferred.

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