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The first cryptocurrency pushed back from the support line at $29,000 and began a new rally. What has happened in the market since our last review? Just the facts from a fundamental and technical point of view.
BTCUSD
Fundamental analysis
The sharp drop in bitcoin over the last 3 months began with the introduction of restrictions on mining in China. In fact, the authorities have put the industry under a ban. A huge number of miners went offline, dropping their hash rate. This resulted in the remaining miners increasing their profits despite the drop in BTC quotations.
Great news for holders of the first cryptocurrency. Last week, for the first time in 3 months, the network’s hash rate started rising again. This indicates that the mining devices are being transported out of China and connected in new locations. This process will increase every week. The complexity of mining will increase. This means that the cost of mining new coins will also increase.
We can state that any negativity from China no longer hangs over the market. In the Middle Kingdom, all cryptocurrency companies are banned. And they have all been permanently squeezed out of the country.
According to researchers, whales with wallets of 100-10,000 BTC have accumulated an additional 170,000 BTC during the market crash. What does that tell you? While the public was selling off coins in a panic, the most knowledgeable people in the industry were conversely buying them up. Why were they doing this? And what were their expectations? We think you can do the answer for yourself.
Technical analysis
The daily chart above shows that the bitcoin not only broke through the 200-day moving average again from bottom to top. But it has also consolidated above it. Moreover, the sharp rise of the first cryptocurrency led to a large number of algorithmic buyers entering the market. For example, on signals such as the new 20-day high.
Again, if you look at this chart, you can see that the bears, especially those standing in a position with shoulders, are very afraid. There are no resistance lines to be seen at the top. If the rise continues, there is nothing to stop the first cryptocurrency from heading towards the $50,000 level. The move could further accelerate on the closing of the shorts on margin calls.
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