Bitcoin failed to break the $40K threshold again, remaining within a corrective scenario. Nevertheless, the support level of around $35K has not been broken, and crypto market participants are not panicking. After impressive growth in October-January, the benchmark cryptocurrency needs a consolidation period. The $33K-$40K price fluctuations fit into the idea of an acceptable fluctuation range for this market. On the other hand, the sharp bullish momentum is now on pause.
The total capitalization of the crypto market holds just above $1 trillion, occasionally falling below that level due to waves of corrections. However, the market is fluctuating near a historic high which was unreachable even during the rally at the end of 2017.
Another positive sign can be seen in the decline of the Crypto Fear & Greed Index for Bitcoin and major cryptocurrencies. Since last week, the index has fallen 11 points to a value of "79," which although still consistent with the "extreme greed" mode, is still much closer to a neutral level. The RSI on the daily charts moved out of the overbought zone, reflecting neutral values.
Biden's approval of a new $1.9 trillion stimulus package may also be seen by market participants as a catalyst for Bitcoin and the market as a whole. The global economy and the situation around the coronavirus are not conducive to a return to growth, so investors may increasingly look to cryptocurrencies as a means to diversify their investments.
In early 2021, the focus will be on renewed investment from big capital, as well as the volumes of PayPal and other large companies that have announced their interest in the cryptocurrency market. Also, the tumultuous price rally runs the risk that regulators will once again focus on the sector, primarily in the United States. As we have seen with XRP, lawsuits from the SEC could put an end to any cryptocurrency, no matter how promising its technology may be.
Trade Responsibly. CFDs and Spread Betting are complex instruments and come with a high risk of losing money rapidly due to leverage. 77.37% of retail investor accounts lose money when trading CFDs and Spread Betting with this provider. The Analysts' opinions are for informational purposes only and should not be considered as a recommendation or trading advice.
Recommended Content
Editors’ Picks
Top 3 Price Prediction Bitcoin, Ethereum, Ripple: BTC declines as resistance emerges near all-time high
Bitcoin and Ethereum are approaching their key support levels, and a sustained close below these marks could lead to further declines.
TON set to launch synthetic Bitcoin to boost its DeFi solutions
TON revealed its plan on Thursday to launch a synthetic Bitcoin token on its blockchain, allowing users to trade, stake, and earn yield using BTC. Following the announcement, TON is down over 3%.
Maker Price Forecast: MKR could stage 40% rally
MakerDAO is up 2% on Thursday and could be set for a 40% rise in the coming weeks if it successfully maintains an extended move above the descending trendline of a falling wedge. On-chain data also supports the bullish outlook after a four-month-long decline.
USDT market cap crosses $120 billion as stablecoins continue their uptrend
The stablecoin market cap continued its uptrend in October, characterized by USDT reaching a $120 billion market cap, according to a CCData report on Thursday. This indicates that investors are preparing liquidity to fuel more demand.
Bitcoin: New all-time high at $78,900 looks feasible
Bitcoin price declines over 2% this week, but the bounce from a key technical level on the weekly chart signals chances of hitting a new all-time high in the short term. US spot Bitcoin ETFs posted $596 million in inflows until Thursday despite the increased profit-taking activity.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.