Extreme Fear Persists in the Bitcoin World – What’s Next for Bitcoin Price?
When the chaos subsides, the price of Bitcoin will resume its ascent.
Bitcoin is a world apart. And that's why we love this world so much. At times, as much happens in one week in the Bitcoin world as in several months in the traditional markets.
What we have been experiencing since May 13, 2021, is one of those times.
It all started with a tweet from Elon Musk explaining that Tesla was ending support for Bitcoin payments because of concerns about the environmental impact of the digital currency king.
Chaos grips the industry even though the fundamentals have not changed
This clearly sent the cryptocurrency industry into chaos. A chaos that has only intensified since then with FUD reports coming out of China. China is reportedly in the process of banning Bitcoin and cryptocurrencies. This news is just a reminder of what China already put in place several years ago.
Regardless, it was enough to reinforce the fear of some and cause the price of Bitcoin to fall further and further.
Those wishing to take advantage of these moments of fear to accumulate more Bitcoin have also put forward FUD rumors about the IRS in the US investigating Binance for alleged money laundering practices. As always, these are simply unsourced rumors.
May 19, 2021, was the day of the first Bitcoin crash for many new entrants to this world. On that day, the price of Bitcoin dropped from $43K to $30K in a matter of hours:
Bitcoin price rebounds strongly but runs into $42K resistance several times
The strong rebound to the $30K level showed that large accounts were still bullish on Bitcoin for the coming months. They took the opportunity to accumulate more BTC.
The price of Bitcoin then ran into the $42K resistance several times.
As is logical in such a situation, the Bitcoin price then tested lower levels. Fear continues to be at an extreme level in the market despite clear signs that this Bull Market is far from over:
FUD from China intensifies
Another piece of FUD news arrived from China on May 21, 2021. A Reuters article reinforced the sense of panic:
China would therefore like to commit to cracking down on Bitcoin mining activities, in addition to trading activities. China seems to be blowing hot and cold when it comes to Bitcoin and cryptocurrencies, as just a month ago, officials explained that clearer regulations needed to be defined to oversee Bitcoin which was here to stay.
This has caused the price of Bitcoin to fall again, testing the $33.5K - $34K support:
The price of Bitcoin then rebounded to around $36K as I write this.
The situation may remain chaotic for several more days, but the Bull Market is far from over
In the coming days, we will probably see this type of movement. The Bitcoin price will consolidate in this area while the FUD information from China is ingested by the market.
Once the market understands that the fundamentals of Bitcoin remain the same, we can look to move higher, but that will require breaking the $42K resistance. Then we need to hit the $48K level.
If the $30K support is broken, however, we will have to look lower at the following supports: $28.5K, $24K, $20K.
My feeling is that the market is oversold right now. Those who have enough confidence in Bitcoin and know how to be patient will take the opportunity to accumulate more BTC. The others will either continue to sell because of this extreme fear in the market or wait and not act.
For my part, I remain convinced that this Bull Market is far from over, and I will continue to build up my positions given what lies ahead for Bitcoin in the coming months. It's up to you to decide what your strategy will be.
In Bitcoin We Trust
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