Why a possible decrease in the price of the first cryptocurrency to $ 55 thousand will not affect the overall “bullish” trend and what keeps the asset from going into a deep “bearish” phase
On November 17, the price of bitcoin fell to a two-week local low of $ 58.3 thousand. This happened after the first cryptocurrency set an all-time high at $ 69 thousand on November 10. Now the asset is traded at $ 60.5 thousand. Topplabs.org experts explained, what is happening on the crypto market now and is it worth buying bitcoin now.
Why did the decline occur
Cryptocurrency market quotes fell against the background of news about the signing of an infrastructure plan by US President Joe Biden, the head of the analytical department of AMarkets Artem Deev is sure. According to him, this law actually equated digital assets to cash and obliged brokers and operators to report to the tax service on all cryptocurrency transactions worth more than $ 10 thousand.
“The reporting will need to indicate information on the sender of digital assets, and those who do not do this will be considered violators of the law. Of course, such news could not but lead to negative investors – as a result, sales began on the market, ”the analyst explained.
According to Deev, the backlash was mainly from retail investors, and institutions continue to maintain positions in the cryptocurrency. Given the fact that the law itself will enter into force only in 2024, we can talk about a temporary correction in the digital asset market, the analyst noted.
The market is correcting
The current decline in bitcoin to $ 58.3 thousand is a correction relative to the growth of recent weeks, said leading analyst at 8848 Invest Viktor Pershikov. According to him, many market participants take advantage of the situation and actively buy the first cryptocurrency on a drawdown, as indicated by various indicators.
“The decline in prices on the crypto market in recent days is due to the growth in sales of cryptocurrency by institutions, but there are currently no negative fundamental factors,” the analyst explained.
According to Pershikov's forecast, the price of bitcoin within the framework of the current correction may drop to $ 55 thousand, but by the end of the year there is a high probability of updating the historical maximum above $ 70 thousand.
The recent update of the bitcoin network, along with an increase in the volume of purchases by institutions and the start of trading in the first bitcoin ETF in the United States, outweighs the local negativity, so a significant drop in the crypto market is not expected in the coming months, Pershikov added.
On November 14, the first cryptocurrency network launched the Taproot update, which aims to improve the scalability, privacy and efficiency of the Bitcoin network. On October 19, the first U.S. exchange-traded fund based on bitcoin futures began trading on the New York Stock Exchange (NYSE). Two days after the start of trading, assets under the Bitcoin Strategy ETF (ticker BITO) of ProShares exceeded $ 1 billion. The fund broke the record for the growth rate to $ 1 billion, which was held for 18 years.
Bullish trend is strong
In general, the fundamental mood of the crypto market is now very positive, says the co-founder of Crypterium Vladimir Gorbunov. According to him, it is too early to talk about the market's transition to a bearish phase at the moment.
“Even if today bitcoin fell to $ 45 thousand, it still has the potential for growth to a level of $ 100 thousand and more,” the expert noted.
According to Gorbunov, Bitcoin has many factors to continue its growth: a large number of investors enter the market, global players such as Visa and Mastercard are actively moving towards cryptocurrencies and are adapting more and more new services from the classic infrastructure for the crypto market.