Tuesday, July 27, 2021

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    Bitcoin went back down, but there are signs encouraging a new bullish rally

    These investors typically have between 1,000 and 10,000 bitcoins in their wallet. At the moment they are adding more and it is estimated that they have more than 4,200 million, the highest level since May when the collapse began.

    the renewed accumulation by the ‘whales’ is good news for the market, as these wealthy investors played a major role in the bitcoin rally from $10,000 to almost $60,000 that was deployed for five months until February 2021.

    According to experts, the new rally in this data suggests that the retracement experienced during the following months may have bottomed out, which is indicative of the bulls taking back control of cryptos.

    Bitcoin closed its worst second quarter in history with a cumulative slump of 45% and at the half-yearly level showed its worst performance since 2018. Today it trades below $34,000, when in 2021, the year of the cryptocurrencies, it reached its high near $65,000.

    It should be noted that despite the downward correction of 45% in recent weeks, it is up 25% on the year. And now there are conflicting opinions between those who believe it will continue to fall and those who think it will rise again.

    Other cryptos like Ethereum aren’t doing particularly well in this second quarter of the year either but, despite everything, this altcoin is on track to close its best first half since 2017 with a rally of about 185% in this first half of the year.

    In the case of Dogecoin, the cryptocurrency ‘meme’, rose 380% in the second quarter, a figure that pales when compared to the 980% rally with which it has closed the first quarter of the year. It is currently far from its highs recorded in early May, at 74.07 cents.

    Going back to Bitcoin, what now really divides experts is whether its big correction is over or not. Some think it may continue to fall to $12,000, while others see it above $110,000 by 2022 and many others believe the $100,000 is mission impossible, at least, for this year.

    For strategists Barry B. Bannister and Thomas R. Carroll of investment bank Stifel, Bitcoin will continue to fall to $12,000. They base their theory on what they call the ‘trade’ of recovery.

    “The price crash has been simmering for weeks,” acknowledges Simon Peters, a crypto-asset analyst at eToro.

    “The moral is that all markets have ups and downs, but cryptos are still a new and volatile asset class that has yet to be tested in an inflationary ecosystem,” Peters said. “Investors should therefore avoid making decisions based only on their price,” he advises.

    What if it falls below $10,000? The odds of this happening have remained unchanged at 21%, according to the study. In addition, the most likely alternative is that the queen of cryptocurrencies will put an end to 2021 above 50,000 dollars, with 52%.

    “The idea of investing solely and exclusively to speculate is going to lose steam, and that’s a good thing,” says Barry Norris of Argonaut Capital. Norris’ words make special sense when you consider her crypto-sceptic past (and present) backed by getting a 50% return by falling short on MicroStrategy.

    “Most people who refer to cryptos with some even religious reverence have no idea about investing… let’s see where that takes them,” warns Norris.

    On the side of those who believe that Bitcoin will rise is the technical analyst of Bolsamanía, J.M. Rodríguez. “There are small details that invite optimism in bitcoin after a crash from the annual and historical highs ($ 65,520),” although “figure back as such we do not have yet”.

    “Everything suggests that bitcoin can attack at any time the significant resistance it has at $41,335: June highs and last decreasing high,” he concludes.

    The growth forecast of assets such as bitcoin estimate the maximum value of the cryptocurrency at $112,800 by 2022, according to a study published by StormGain, a leading international cryptocurrency trading platform, which raises and studies the main risks to the cryptocurrency market.

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