Bitcoin Correction Towards $40K Back in Focus as Rally Pauses – Bitcoinist.com


Bitcoin lost steam on Wednesday, pausing a bull run that had accelerated on the backs of Tesla’s $1.5 billion investment and optimism over a massive stimulus package in the United States.

The benchmark cryptocurrency closed marginally higher by 0.14 percent on Tuesday, forming a Doji candle that shows an imminent bias conflict in the market. Today, during the Asian session, Bitcoin showed signs of bearish reversal (short-term) after dipping by more than 1 percent to hit an intraday low near $45,666.

How To Get Free Crypto  

At its highest, the cryptocurrency was trading at $48,200 in a follow-up to its 20 percent rise on Monday.

Bitcoin corrects modestly after hitting a record high above $48,000. Source: BTCUSD on TradingView.com

The reversal came despite the euphoria surrounding Tesla’s consideration of Bitcoin as an alternative to cash, a narrative that bulls had pushed for years. Also, US President Joe Biden’s pressure on Congress to pass a $1.9 trillion stimulus aid avoided offering tailwinds to the Bitcoin price rally.

Headwinds Appear, Nonetheless

In a note to investors, JPMorgan & Chase strategists led by Nikolaos Panigirtzoglou said Tesla’s bitcoin bet would not result in copycat investments from other major corporates. They argued that the cryptocurrency is still too volatile to replace cash as a store-of-value asset effectively.

Jerry Klein, managing director at New York-based investment management firm Treasury Partners, also noted Tesla’s move makes no sense. In an interview with the Financial Times, the Wall Street professional noted that corporates are willing to accept a low return rate via cash than to balloon their risks by investing in Bitcoin.

“I don’t think there is a case to be made for investing corporate cash in a risky asset like bitcoin, where they could experience significant declines.”

Meanwhile, many analysts within the cryptocurrency space expressed their risk-aversion bias towards Bitcoin, with independent technical chartist Kevin Cage hoping to see the price at $74,000 but still warning about a major downside pullback should the rally fail to mature.

Coinbase Banner  

“It won’t last forever, but I hope we get a few more months of PUMPS,” the analyst tweeted Wednesday.

Bitcoin at $40K?

A dissenting outlook over Tesla’s investment into the Bitcoin market appears to have counterbalanced the ongoing bullish euphoria. Traders typically use these periods to withdraw their profits and wait for another dip to repurchase the underlying asset.

For instance, after PayPal announced in October last year that it would enable bitcoin services on its platform, the cryptocurrency surged by over 60 percent within the next month—from $11,900 to $19,469. Nevertheless, it later underwent a 16.92 percent downside correction on profit-taking sentiment.

Comparing PayPal and Tesla Pump. Source: BTCUSD on TradingView.com

Bitcoin later bounced back after spotting a support level near its 20-day exponential moving average (the green wave in the chart above). The cryptocurrency stretched its rebound to a new all-time high just yesterday, led by Tesla. It could now attempt to undergo a similar, healthy correction towards the green wave. It sits near $40,000.

Go to Source
Author: Yashu Gola


Recommended Crypto Services, Products and Strategies:

The first thing any crypto investor needs is is a reliable and secure Crypto Wallet.  Whether you’re looking for an online wallet, hardware wallet, desktop or mobile wallet, Crypto Renegade provides you with all the Best Crypto Wallets in each category.

FreeBitcoin Banner  

Best Crypto Wallets Banner

When you’re ready to buy more crypto, or exchange your coins for others, Crypto Renegade’s list of the Best Crypto Exchanges has you covered.  The Crypto Exchanges recommended here offer everything from simplicity and convenience to advanced trading platforms and profit sharing. 

Best Crypto Exchanges Banner

If you want to learn more about the methods and tools that can be used to find Great Crypto Projects, then be sure to check out Crypto Renegade’s strategy for How To Find The Best Cryptocurrency.

Crypto Strategy Banner

For those people that don’t have any money to invest right now, or just want to understand the technology a bit more, you’ll definitely want to check out Crypto Renegade’s Free Crypto Strategy and start collecting Free Coins today!

Free Crypto Banner

What do you think about cryptocurrency? Do you have any questions about it? Be sure to leave a comment below.

This site uses Akismet to reduce spam. Learn how your comment data is processed.