On November 16, the price of the first cryptocurrency fell to a two-week local minimum of $ 58.5 thousand. Should we expect a further decline in quotations or the market will be able to return to growth in the near future
On the afternoon of November 16, the price of bitcoin for the first time since the end of October fell to $ 58.5 thousand. During the day, the first cryptocurrency fell by more than 10%, and its capitalization fell to $ 1.12 trillion. The topplabs.org experts explained what is happening in the digital asset market and whether another decline in quotations may follow in the near future.
Prerequisites for the collapse
The main reason for the collapse of cryptocurrency market quotes on November 16 is the introduction of new reporting rules for crypto brokers and operators in the United States, says Ivan Petukhovsky, co-founder of the EXMO crypto exchange. He recalled that US President Joe Biden signed the Infrastructure Funding Act, which obliges organizations working with digital assets to report all transactions worth more than $ 10,000 to the tax office.
“We see that the stock market is also correcting against this background, and the dollar has been strengthening for several days in a row. Since the cryptocurrency is now at local highs, this is also a reason to correct a little, ”the expert noted.
According to Petukhovsky, bitcoin will manage to stay above $ 58 thousand, and this zone can be considered as attractive for purchases.
News from China also had a negative impact on the digital asset market, where they once again announced the fight against cryptocurrencies, Andrey Podolyan, CEO of Cryptorg, is sure. Wei Meng, spokesman for China's National Development and Reform Commission (NDRC), said the country's authorities will continue to fight illegal cryptocurrency mining at state-owned enterprises.
“In a bull market, news like this is a good chance to make long-awaited purchases. The main thing is to decide for yourself whether the market is still bullish or the beginning of a bearish one, ”Podolyan noted.
The market pushed off
On November 16, a quite expected event took place on the crypto market – the beginning of a full-fledged local correction, says Nikita Zuborev, senior analyst at Bestchange.ru. According to him, the market pushed off the significant mark of $ 3 trillion in capitalization and entered a local downtrend.
“Despite the fact that investor sentiment is ambiguous, we expect only a medium-term correction, the long-term trend for market growth continues to be considered relevant,” the analyst said.
Even in such an ambiguous situation, the market for institutional investors is dominated by bullish sentiment, Zuborev added. According to him, long positions are again hitting records against the background of a small "sale" of assets.
According to Zuborev's forecast, the crypto market is facing a difficult week or even a month, since there are no prerequisites for a change in the local trend towards growth. The expectations of private investors are still quite positive, so large players may continue to attack the market and reduce the bitcoin rate even further, up to $ 55 thousand at the peak of the fall within the next month, the analyst explained.
“But long-term forecasts remain at the same levels – we expect to see a six-figure price for bitcoin at the turn of 2021 and 2022,” summed up Zuborev.