June 19, 2024

Why the jump in Bitcoin didn’t help him escape from the bear trap

Why the jump in Bitcoin didn’t help him escape from the bear trap

Although the night of Friday to SaturdayBitcoin price increased by more than 20%, it still could not get out of the four-month downstream channel. In the near future, analysts predict a pullback to the support level in the region of $ 8800.

Chinese momentum

Throughout Thursday and most of Friday, bitcoin was trading at around $7,450, but that changed dramatically after a speech by Chinese President Xi Jinping, who called blockchain technology important and called for it to be actively used as a basis for innovativedevelopment of the country.

This seems to have inspired the cryptocurrency market,since over the next 15 hours the Bitcoin exchange rate increased by 35%, from $ 7470 to $ 10120, and at the peak reached $ 10350. Although the market has consolidated since then, and at the time of publication of the material, the MTC is trading at $ 9,460, but an increase of 26.6% is still maintained. Over the past week, growth was 16%, which is one of the best indicators in 2019.

The subsequent news of the adoption of the first in the PRCThe law establishing the legal basis for the commercial use of cryptocurrencies did not have such a strong impact on the market, but it probably prevented a quick rollback to previous or even lower levels.

Bakkt Effect

For a long time, analysts have been confused about the weak start of Bakkt trading and the negative dynamics of bitcoin.Last week, the "unknown bears" tested the market three times, collapsing the BTC rate below $8000.It became clear that with lower prices, buyer activity increases disproportionately, and it is in the area between $7,000 and $8,000 that the optimal entry point is located.

According to EXANTE analyst Viktor Argonov, after the price of bitcoin collapsed again on October 23, the long-awaited Bakkt  heavy artillery entered the fray.Throughout the day, the platform's participants actively concluded futures contracts at prices of about $7,500, signaling that these are favorable conditions.

On that day, a historical record was also set for trading on the young platform, which amounted to about $5 million, and a day later - twice as much - $10 million. The expert believes that this has become another growth factor.

Controversial breakthrough

Despite such a jump in the course, bitcoin graphicsfailed to form a bullish trend. It is still inside the downward channel, which originated in late June after reaching a maximum of $ 13,880 this year. In order to leave the bear trap, the price should gain a foothold above the resistance in the region of $ 9700.

Why the jump in Bitcoin didn’t help him escape from the bear trap

The depletion of trading volume and sideways movement also indicate a weakening of interest from buyers.Without a new powerful impulse, the rate is likely to continue to decline gradually.move to the next support level at $8800.

Recession ahead of halving

According to historical data, on the eve of eachreduction of miners' remuneration, the rate was usually below the average price level until large leaps gradually brought it to the desired level.

Programmer Rob Wolfram used indicatorsof past years to form a graph of calculated exchange rate values ​​with bands of traditional deviations. It shows that in 2012 and 2016, on the eve of halving, bitcoin was in a bear market near the lower border of the deviation band.

Why the jump in Bitcoin didn’t help him escape from the bear trap

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