This week saw more bullish news, such as Germany’s first publicly traded company investing its cash reserves in BTC, as well as the launch of Canada’s first bitcoin ETF, which debuted with over $220 million.
Just for today.
– Elon Musk (@elonmusk) February 19, 2021
This news is driving up the price of bitcoin, while Elon Musk has also embraced the latest laser eye meme, much to the delight of hodlers looking for BTC worth $100,000. However, the next big drawdown is around $63,000, and it could be reached relatively soon if bitcoin can hold support above several key levels.
Bitcoin continues to recover and hold at critical levels.
XBT/USD 4-hour chart. Source: TradingView
The four-hour chart for bitcoin shows a clear upward trend since it broke out of the $30,000 to $42,000 range. Since then, a critical level of $44,000 has been maintained as support. The total cost of the project would be $150,000 and $50,000 respectively. The $55,000 in the first quarter that served as a launching pad for the current highs above $55,000.
This rush is also due to a drop in reserves on the stock markets. This is very similar to the situation in late 2016, when more bitcoins were withdrawn from exchanges than deposited. These withdrawals mean that people want to hold their bitcoin for a long time, indicating high demand and low time preference.
During the recent rally, the first Fibonacci level of 1,618 was reached. Bitcoin is now approaching the second point of interest at the Fibonacci 2,618 level around $63,000.
On the other hand, the $50,000 level on the four-hour chart is crucial. If this support holds, there is a good chance that the bitcoin price will reach this level next time. But if he loses $50,000, we can expect an even bigger drop to $43,000.
Total market capitalization cryptocurrencies reaches $1.7 trillion
Chartof the total market capitalization of cryptocurrencies over 1 week. Source: TradingView
Meanwhile, the total market capitalization of cryptocurrencies is approaching the $2 trillion mark this cycle, which many would not have predicted last year.
However, after breaking the all-time high of 2017, the next interesting level was $1.2 trillion, which is also the Fibonacci zone of 1.618.
This area has been broken upwards and the market cap is now targeting $1.85 trillion, the Fibonacci level of 2,618. The chart also shows a large gap between the 21-week MA and current price, suggesting that the rally could be extended.
Historically, late February and March are not bullish for the market, so a correction should not be a surprise. In this case, a $1.2 trillion reconsideration is certainly in order.
Critical levels for BTCPrices to watch
XBT/USD 4-hour chart. Source: TradingView
Trading is about maintaining critical support levels for further upward or downward movement. In this case, the first key level is between $43,000 and $44,000 and the second key level is between $50,000 and $1,000.
However, the same can now be said for $55,000 on the lower time frame, namely the one-hour candlestick chart. If it is lost, there will be a gap down into the next support area, so a breakout to the $50,000 mark can then be expected.
However, as long as the $55,000 is held, the price of bitcoin will not be able to reach the next Fibonacci level at $63,000.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Cointelegraph. Every investment and every stage of trading involves risk. You should do your own research before making a decision.
frequently asked questions
Will the price of bitcoin fall after it halves?
Made with Sketch. A few weeks later, bitcoin rose again, leading to an impending halving. But if historical patterns are to be believed, cryptocurrencies can experience a temporary drop in price after a supply change.
What happens to the price of bitcoin if it is split in half?
The halving of bitcoins occurs when the reward per block, or the number of bitcoins circulating when a block is produced (approximately every 10 minutes), is halved. … This supply effect increases the scarcity of bitcoin, which has historically driven the price up.
What is the average number of bitcoins owned?
There are currently about 2 million non-empty bitcoin addresses, of which I estimate 600,000 people (because almost everyone has multiple addresses). So the current average is around 20 BTC.
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