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Elon Musk’s tweets about the centralization of bitcoin and the ban on supporting the cryptocurrency business in China were among the main reasons for the fall of the first cryptocurrency on May 19, up to the level of $ 30,000. At the time of writing, the asset price has returned to values of about $ 38,000.
ForkLog talked to experts about the further dynamics of the bitcoin price and the risks of selling from large investors.
The prerequisites for the fall of the cryptocurrency market arose last week with Tesla’s refusal to accept payments in bitcoin and rumors about the possible sale of the coin from the company’s assets.
“The actions of Elon Musk disappointed investors, as the hopes for the release of bitcoin into the world of large multinational companies have not yet come true,” said Yuri Mazur, head of the data analysis department at CEX.IO Broker.
The bearish sentiment of market participants was aggravated by the news that support for cryptocurrency-related businesses was banned in China.
As explained by the director of Binance in Russia and the CIS, Gleb Kostarev, the National Internet Finance Association of China, the Chinese Banking Association and the Payment and Clearing Association, which issued a statement, are not regulators, but actively monitor the work of the members of these organizations and the observance of the policies they have adopted.
“Now the market fears that, following China, a ban may be introduced in other countries,” added Kostarev.
The PRC has huge mining capacities and a large share of the e-commerce market, which is targeted by cryptocurrencies.
The leading strategist of Exante, Janis Kivkulis, believes that the fall is due to the general disappointment of investors in the dynamics of cryptocurrencies, and Musk’s tweets and the PRC bans “fell into fertile soil.”
“The price is being pulled up by new buyers counting on the price growth. Without such dynamics, the market turned out to be vulnerable in the last month. At first it was greed, then speculation on the news, and now the liquidation of margin positions and total risk-off in cryptocurrencies, ”he said.
A prerequisite for a further fall in the market is the violation of a key technical barrier that can trigger sales.
“A number of analysts talk about the possible departure of institutional investors from cryptocurrency to traditional assets. But in the current realities, an influx of institutions is also possible, because now, against the background of low levels, the market is becoming attractive for large buyers, ”said Gleb Kostarev.
Yuri Mazur does not exclude the risk of an outflow of whales from cryptocurrencies:
“But there is no need to dramatize the situation, since a decline in the price of an asset can become a good basis for long-term long positions for large investors. Sell-offs are possible within stop-losses, but arbitrageurs are more likely to catch them and the market will level out. “
Janis Kivkulis suggested that large investors “were cautiously dumping the asset in the previous months, and now they are liquidating by stop orders, increasing the sell-off, which at the moment exceeded 20%.”
“It is possible that right now physicists will do the same with cryptocurrencies that they did with the stock market a year ago – they will start buying back the fall. But history also suggests that the events of this May could be a repetition of the big reversals of 2013 and 2018, after which it took 4 years to update all-time highs, ”said a leading strategist at Exante.
According to the negative scenario of CEX.IO, bitcoin may adjust to $ 30,000- $ 35,000 by June. Now bitcoin quotes are at $ 37,000.
“This fits into a corrective scenario with a subsequent return to a moderate bullish trend and a range of $ 50,000- $ 55,000. However, we do not exclude that during this week Bitcoin will try to test the strength of levels near $ 30,000. In this case, even a short-term touch of the value of $ 26 is possible. 000 “, – suggested the exchange analyst Yuri Mazur.
The level near $ 31,000 – the area of the lows of the January correction – will be a test of strength for bitcoin, continues Janis Kivkulis. At the same time, the market can show a very large range of movements:
“If the sellers outweigh the strength, the rate could very quickly fall to $ 23,000, where bitcoin traded at the end of last year. If a rebound develops, the bulls will be able to celebrate victory only at levels above $ 50,000. “
According to the forecast of the head of the Six Nines data center, Sergei Troshin, the bitcoin price will stabilize at the current level with a deviation of plus or minus 15% and will gradually restore growth.
“After such a strong correction, growth has been measured for months and even years. Bitcoin will not quickly return to its previous levels, ”he summed up.
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