Bitcoin is Finally on the Move! But not Past US$45,000
Although the cryptocurrency is up a little from its recent low, BTC is facing strong resistance at US$45,000
‘Could it be a ghost?’ asks cryptocurrency investors. Yes, Bitcoin is finally on the move after staying below US$40,000 for almost four months, but this time, without a reason. Usually, Bitcoin rallies are triggered by market changes or increased adoption. The November all-time high was feasible solely because of Bitcoin ETF’s debut in the NYSE. However, although the cryptocurrency is up a little from its recent low, BTC is facing strong resistance at US$45,000.
Bitcoin is often hailed as the ‘Gold’ of the cryptocurrency market. Emerging as the first and foremost digital token, BTC changed the outlook on blockchain technology and created an edge to the decentralized model. Over years, many altcoins also entered the cryptocurrency sphere. Despite the growing number of tokens in circulation, Bitcoin still remains at the top. Recently, it reached a record high in November last year. However, after the record-breaking value spike, Bitcoin’s price was on a bearish trend. It fell to as low as US$32,000, menacing investors of an approaching death cross. Fortunately, before things could get any worse, Bitcoin is back on track. The world’s leading cryptocurrency by market value breached the US$45,000 milestone for the first time in months yesterday. It later dipped to US$44,800. Analyzing the price graph, experts say that BTC is facing strong resistance at US$45,000 and might actually suffer to overcome it.
According to some investors, this recovery is pretty fast and uncertain. Graphs also suggest that Bitcoin has moved above its trend-line from its November highs, so it has plenty of room to take a breather over the next few days without disrupting its recent advance. In recent months, not just cryptocurrencies, even other investment models have experienced a lot of volatility. The US Federal Reserve’s announcement to increase interest rates and the emergence of the Omicron variant has put all investments in jeopardy. On the negative side, the cryptocurrency market happened to be at the worst-hit place. Since Bitcoin’s price was down, other altcoins are also experiencing major price plummets. Despite the resistance level, enthusiasts believe that once Bitcoin gets moving, it will overcome the barriers easily.
Taking a Look at the Price Trend in the Recent Past
Ever since the Federal Reserve came up with the initiative to increase rates and begin tapering its purchase of bonds, Bitcoin’s value was threatened. The hit was so hard that BTC failed to keep up its market position throughout December and January. Usually, January is a good month for the cryptocurrency market. Keeping the short history in mind, investors were pretty convinced that the cryptocurrencies including Bitcoin and altcoins make a comeback in the first month of the year although they face slumps in the year ends. Similarly, towards the end of December 2021, Bitcoin peaked at US$51,000, developing hope among investors. However, things didn’t go well as they expected. Bitcoin’s price was hovering around US$41,000 at the beginning of January 2022.
On the other hand, altcoins like Ethereum also faced a major value decrease over the past few months. From its all-time high of US$4,800, ETH fell to US$3,100 in February.
What does this Resistance Mean for Investors?
For long-term investors, nothing that happens in the cryptocurrency market will look concerning. Most of them might’ve signed up for virtual investment only after knowing the downsides. Additionally, many investors might’ve already come across such drastic falls and long-stood resistance levels in the past in 2017 and 2018, and maybe 2020. Therefore, sailing through this bullish period might not be a big problem for them. They might also be familiar with the predictions that suggest Bitcoin will reach US$100,000 by the end of 2022.
However, for people who are investing in BTC in the short run and panned to withdraw money once it hits a new high, the trend might be distressing. Still, if you follow experts’ recommendations and keep your cryptocurrency investment under 5% of your portfolio, this might be less concerning.
On the Sidelines
While the cryptocurrency market is undergoing a gloomy phase, scams and thefts are still at their highest. Recently, the US Justice Department has announced that they have recovered more than 94,000 Bitcoin stolen in 2016, currently valued at US$3.6 billion. A couple behind the scam who is accused of seeking to launder the Bitcoin was also arrested.
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