Relevance up to 00:00 2021-10-16 UTC–4
Bitcoin managed to easily break through the 76.4% Fibonacci level. Now, it continues to grow at a high rate. In principle, the cryptocurrency has only one significant level – the price’s historical high of $ 64,700. Therefore, the price may reach this value today or tomorrow, since it is currently trading at $ 59,500. We also continue to draw the attention of traders to the fact that there is no visible fundamental background for active bitcoin purchases right now. In principle, the whole movement, starting from $ 30,000 per coin, can be called quite groundless. So from our point of view, we are now talking about another “hype”, which is always difficult to predict.
In fact, we are not the only ones who adhere to this point of view. It became known a few weeks ago that the US Securities and Exchange Commission may allow exchange-traded investment funds to trade bitcoin this month. All funds that have applied to the SEC are going to trade on the Chicago Mercantile Exchange. This is not even bitcoin itself, but bitcoin futures. As a result, many experts believe that “digital gold” is now growing on expectations of SEC approval of these applications. However, other experts also believe that when this happens, Bitcoin may start to decline, rather than continue to grow. We are talking about the so-called “advance” growth or, as traders say, “buy on rumors, sell on facts.”
That being said, it is possible that the reason for the massive purchases of the main cryptocurrency now is the possible admission of the ETF to the Chicago Mercantile Exchange. The SEC may publish the relevant decision as early as October 18-19, that is, in just a few days. That is why many experts believe that bitcoin may start a new decline, which will be triggered by mass profit-taking. At the moment, it is difficult to say whether this will actually be the case, but this idea needs to be kept in mind by all bitcoin owners. It should also be noted that Bitcoin grew by 2,500% in 2017 in anticipation of the resolution of bitcoin futures, and then collapsed by 80%.
From a technical point of view, it is also worth noting that the upward trend still remains. On the daily timeframe, quotes are very far from the trend line, so if a collapse happens, many traders will not be able to react to it in time. Therefore, it is recommended to use Stop Loss orders and focus on the nearest support and resistance levels, from which rebounds or breaks may follow. It should be borne in mind that Bitcoin can not only grow at a rapid pace but also plummeted.
There is still an ascending trend in the daily timeframe after the price managed to break through the level of $ 56,500. This trend line supports the bulls, so it will be possible to talk about a new strong decline in Bitcoin only after breaking this line, which is very late. The upward target remains at the level of $ 64,700, and if a rebound occurs from it, traders must consider the option to make a correction. It is also suggested to pay attention to the four-hour timeframe, where it is possible to form an upward trend line. Consolidating quotes below which will warn a possible correction more quickly.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
Benefit from analysts’ recommendations right now
Top up trading account
Open trading account
InstaForex analytical reviews will make you fully aware of market trends! Being an InstaForex client, you are provided with a large number of free services for efficient trading.
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade