In the past few weeks, many investors have been expecting Bitcoin to hold out and continue to climb above the $20,000 psychological resistance level
Will Bitcoin continue the current correction?
A lot of investors and analysts in the past few weeks expected Bitcoin to hold out and continue its upward trend above the psychological resistance at $20,000, but they had to face a huge disappointment this week, as instead of going higher, it took a downward correction trajectory and fell to the $18,000 region.
dropped Bitcoin price By 6% in the last 24 hours which saw its price dip below $18,000 for the first time in over a week, it managed to recover significantly and reclaim the $18,300 level as support.
Despite the recent sell-off, most experts agree that the current weakness is a temporary phenomenon and that the cryptocurrency has good chances of regaining its lead at any time. They also expect that it will maintain its long-term upward momentum based on fundamental shifts compared to the situation in 2017.
A more orderly future amid growing interest
It is worth noting that the infrastructure as well as the regulatory framework that was created made it possible for institutional investors to access cryptocurrency, during the rally of the 2017 rally none of this materialized but now things are different.
The future of the cryptocurrency regulatory environment is becoming more and more clear, especially after regional and federal authorities in the United States have announced several binding rules when dealing with cryptocurrencies, which have allowed many companies such as CME Group, Intercontinental Exchange and Fidelity to provide cryptocurrency buying and selling services to investors.
Over the past three years, interest in Bitcoin futures on the CME exchange has reached $1 billion, and the size of the Grayscale Bitcoin-backed fund has increased from $200 million to $10 billion, among other growth factors. Only gold, meaning that the currency is gradually getting rid of the main reason for distrust on the part of large investors, which is its excessive volatility.
Thus, the potential growth of the market value of Bitcoin to $ 1 trillion is just a matter of time, and this may happen in 2021-2022, currently the total market capitalization does not exceed $ 340 billion, it may be the decision of the US Congress to print another trillion dollars to support the country’s economy during the Corona virus crisis Acting as a new catalyst for the growth of cryptocurrencies, such a large increase in the money supply would be more than enough to bring inflationary risks back into the market, and thanks to its deflationary nature the safe bitcoin will surely benefit from it.
News Doesn't Help Bitcoin
It is well known that economic stimulus plans are a perfect recipe for higher inflation in the future and it is a trend that could benefit bitcoin and gold if it occurs.
The increase in the supply of the US currency due to monetary and fiscal stimulus has hurt the value of the US dollar throughout the year, as the dollar index fell to 90.30 points last Monday, the lowest in more than two years from its highs of 104.00 points last March, by contrast, Gold and Bitcoin gained significant momentum as an inflationary hedge during the year.
However, bitcoin remains a risky asset, as over the past two days gold prices rose 2.1% amid positive stimulus talks while the coin fell from $19,500 to $18,600 over the same period.
A professional technical and economic analyst in global financial markets since 2004. He holds a Master’s in Business Administration from the American University in Cairo. He works as an economic writer and technical analyst for many international financial companies. He writes daily economic and technical analyzes for many Arabic and English websites specialized in the field of stock exchanges and financial markets.
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