Bitcoin seems to reverse up from the local dips. Are there enough reasons to buy it now?
BTC: revival after huge sell-off
BCA Research warned investors to ‘stay away’ from the largest cryptocurrency (BTC). Elsewhere JPMorgan said that flows to Bitcoin funds are significantly weaker than in December. Should traders worry about that? Let’s find out.
After a huge sell-off in the previous week, Bitcoin turned to the upside. Some analysts believe it’s only the beginning of the further downtrend. Why? BCA Research pointed to the environmental concerns and tightening regulations as the main headwinds.
Indeed, a huge amount of energy is needed to mine Bitcoin. Thus, some environmental funds may be against the large energy consumption by miners on computer networks.
Besides, governments are interested in BTC losing its value as they don’t have enough tools to regulate it. Moreover, they can lose billions of dollars in revenue from the difference between the face value of money and its production cost.
However, the BTC is still up more than five times over the past year! A strong argument against people who see a speculative bubble. For instance, Square and MicroStrategy used the recent BTC drop as an opportunity to buy the dip.
In the short term, the BTC is likely to rise as the downside is limited by the support of $45,000, which the cryptocurrency has failed to cross several times. If it manages to break above the high of February 24 of $50,000, the way up to the next resistance of $52,000 will be open. The good news for FBS traders is that they can make both buy and sell trades. So a trader doesn’t need to hold already an asset to sell it. Thus, traders have a chance to profit in case of either outcome.
Don't know how to trade cryptocurrencies? Here are some simple steps.
The greatest sale of Bitcoin continues! It has approached the psychological mark of $30,000. The traders’ focus remains on Thursday’s report on US inflation.
The USA expects a release of personal spending on May 28, at 15:30 MT time.
The United States will release retail sales and producer inflation (PPI index) numbers at 15:30 MT time on June 15.
Gold has plunged amid the stronger US dollar as investors await the Fed’s meeting this week.
All eyes are turning to the Federal Reserve and the US dollar. How to trade XAU/USD, EUR/USD, and GBP/USD?