"The vector has changed". Why bitcoin can't get past the $33k level
For the past two days, the first cryptocurrency has been trying to gain a foothold at $33K, helped by news of SpaceX's Bitcoin investment and integration of the digital coin into Twitter social network services.
On the morning of July 23 bitcoin again attempted to gain a foothold at $33,000, but failed to do so. At the moment the rate of digital coin reached $32.9 thousand after the statement of Twitter founder Jack Dorsey that bitcoin will be integrated into the services of the social network. Dorsey also called the first cryptocurrency the best candidate for the role of the global currency of the Internet.
A similar situation was observed yesterday, 22 July. The rate of the main cryptocurrency in the moment reached $32.8 thousand after the statement of the CEO of SpaceX and Tesla Ilon Musk about SpaceX investments in bitcoin.
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"Musk has very often changed his point of view to the radically opposite and the market is tired of reacting. Perhaps the trigger for growth will be something completely new, some kind of deal or a major regulatory move in Europe," the expert explained.
Jax Dorsey is a long-time Bitcoin supporter and CEO of payments company Square. At the beginning of May, Square published its financial report for the first quarter of 2021, which showed that its revenue from bitcoin investments was $3.5 billion.
Square last invested in bitcoin in February 2021. At that time, the company bought $170 million worth of the cryptocurrency at an average price of $51,000 per coin. It previously bought bitcoin in October 2020. The cryptocurrency now accounts for about 5% of Square's total reserves.
Negative backdrop outweighs
Recent positive news is not enough for bitcoin growth, as the fundamental negative background has a greater impact on the cryptocurrency market, said Artem Deyev, head of analytical department at AMarkets. According to him, the current market situation should not be compared to the winter, when in two months the bitcoin price rose by almost 70% and crossed the psychological mark of $50,000, as now the vector has changed and digital assets are no longer "on a high-street".
"The negatives are outweighed and the outlook for the crypto market is not getting too bright. Therefore, positive news is not enough to reverse the downward trend of bitcoin and other coins," the analyst explained.
The news can only strengthen the current trend, but not form a new one, Nikita Zuborev, senior analyst at BestChange.ru, added. He noted that so far bitcoin remains in a local bearish trend, so positive news could not give the first cryptocurrency enough momentum to overcome the level of $33,000.
What's needed for growth
To resume stable growth, bitcoin first needs to consolidate above $35.7 thousand for technical indicators to show a change in the local trend, Zuborev explained. In his opinion, only after that, a confident movement to $43-46 thousand will be possible, otherwise, the accumulation phase will continue with a decline to $30-31 thousand, or the fall will resume.
Head of analytical department of AMarkets adheres to the same opinion. According to his forecast, bitcoin is unlikely to rise above $35,000 in the near future. For the long term, the coin will be trading in the range of $20,000 to $34,000 because there is no impulse for growth, Deyev said.
Bitcoin Cash is thus able to process transactions more quickly than the Bitcoin network, meaning that wait times are shorter and transaction processing fees tend to be lower. The Bitcoin Cash network can handle many more transactions per second than the Bitcoin network can.