Leading RoboForex analyst Dmitry Gurkovsky explains the possible trajectories for bitcoin’s price.
Bitcoin today reached a new all-time high. However, the correction that occurred on 15 February 2021 led to the closure of positions of about 300 000 traders, with total losses of around $2 billion.
Most of these positions were buy bets — traders got ahead of themselves and bought the coin even at market tops. More seasoned investors, however, recommend buying on dips, but at present there is no evident correction, and bitcoin is actively testing new highs.
There is a view that strong upside pressure is aided by the cryptocurrency’s backing by the company Tesla. According to some reports, miners were actively selling bitcoin in January, but after news of Tesla’s purchase of such a volume they are not disposing of the coin so aggressively, and are waiting for higher levels.
However that position is not shared by PayPal, whose chief financial officer said that the company will not invest corporate funds in such assets, but is only prepared to use the opportunities offered by the cryptocurrency markets for its development.
The RSI values on the daily chart remain above 70, indicating a strong bullish impulse. Earlier, such RSI behaviour triggered an aggressive rise of almost $12 000. A comparable rally cannot be ruled out this time either.
The potential for a continuation of the bullish trend would be confirmed by breaking above the upper boundary of the rising channel with the price maintaining above $55 000. A strong support zone sits at $42 000, and only a break of this level could trigger a deeper correction.
Nassim Taleb has spoken negatively about bitcoin and has also sold all of his coins. In his view, the asset did not become a means of payment due to its high volatility.
Indeed, pricing goods in the first cryptocurrency is difficult due to pronounced volatility. In December 2017, they — along with Steve Wozniak, Apple’s co-founder — sold all their coins near the market top, after which the price collapsed.
Wozniak also shared the view on the coin’s volatility and did not want to be the person forever monitoring and worrying about the price. Of course, daily fluctuations weigh on investors emotionally, and rapid price rises can prompt selling.
On the 4-hour chart the quotes have broken above the upper boundary of the rising channel. There is a good chance of further price gains across the width of this channel. The nearest target could be the $55,000 level.
An additional signal in favour of this scenario would be a bounce off the RSI support line, where after testing it the coin price rebounded upwards and continues to rise.
The bearish development should be considered only if the lower boundary of the rising channel is breached and prices stay below $45,000.
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