Bitcoin Rebounds, Where It Goes Next Is Anybody’s Guess
Bitcoin: The Resurgence
by Bogdan Giulvezan
During the last week and a half, Bitcoin jumped from a low of $29,296 to a high of $40,927 and is currently trading very close to that top, at $39,750. This resurgence is due in large part to Jack Dorsey’s (co-founder of Twitter and Square) public show of love for BTC; however, he is not the only one embracing crypto.
During the Bitcoin 2021 Conference, Twitter’s CEO said “Bitcoin changes absolutely everything” and continued by adding “I don’t think there is anything more important in my lifetime to work on […] if I were not at Square or Twitter, I would be working on bitcoin. If [bitcoin] needed more help than Square or Twitter, I would leave them for Bitcoin”.
Adding to Dorsey’s bullishness was Elon Musk’s statement “I own Bitcoin, Tesla owns Bitcoin, SpaceX owns Bitcoin”, which shows that he is still a supporter of the flagship cryptocurrency, despite having environmental concerns about its mining process.
More recently, PayPal announced that it is set to allow British customers to trade cryptocurrencies on a new “super app” and that all this may come as soon as next month. Quoting PayPal CEO Dan Schulman: “Yeah, well, we continue to be really pleased with the momentum we’re seeing on crypto. […] We’re going to launch, hopefully, maybe even next month in the U.K., open up trading there.”
On top of that, PayPal is taking steps towards banking integration, which will “increase the ability to fully integrate it into ACH and do faster payments.” The CEO also suggested that smart contracts and decentralized apps may find their way onto the platform.
With all this wave of bullishness coming from key players, things are looking amazing for Bitcoin and crypto in general but let’s take a look at the charts to see the full picture.
Chart Analysis – BTC/USD
After a long time spent trading in a range, it looks like the pair finally decided on a clear direction, fuelled in part by the recent developments outlined above. The support at $30,000 acted as a springboard that pushed price higher and now it looks like the “bounce-or-break” scenario finally got an answer: Bounce!
The 50 days Moving Average was easily broken and now it will act as support for potential pullbacks; the same applies to the horizontal level at $36,600, but its importance is lower.
Although bullish momentum is strong at the moment, we must note three things that may hinder it, at least in the short term: the key resistance at $40,000, the bearish trend line which is in close vicinity, and the fact that the Relative Strength Index is approaching overbought. Probably the most important element is the level at $40K because a break would indicate that the ranging period is over and would open the door for much higher prices.
