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August 09, 2021 @ 17:06 +03:00
Last weekend was very bright for the crypto market. Bitcoin touched $45K and then faced selling pressure. Nevertheless, bitcoin’s almost daily growth since the beginning of the month has set crypto market participants up for the positive. The benchmark cryptocurrency’s growth in price came with higher trading volumes, though they are far from this year’s highs.
Bitcoin is trading around $44K. The positive trend of the previous days suggests that the bulls are in the mood for a return to levels near $50K, where the last strong sell-off of Bitcoin started in May. From the position of the tech analysis, Bitcoin is enjoying bullish momentum, having received support earlier in August on the decline to the 200-day simple average and breaking above sideways range resistance near $40k.
The Crypto Fear & Greed Index for Bitcoin and the major cryptocurrencies showed sharp gains, reaching 74, consistent with the Greed Mode. The RSI index for the BTCUSD on the daily chart exceeded 70, entering the overbought area. However, consider that Bitcoin often has very long FOMO periods, so it is better to remain cautious in opening short positions.
The most important event last week was Ethereum’s hardfork called London. This event had a very noticeable effect on the price of the leading altcoin. The price of the coin exceeded $3K, at one point reaching $3,200. In 7 days, it is still up 17% as it was growing “above the market” because of hardfork. The price momentum was supported by 16,000 ether coins “burned” and commission three times drop on the Ethereum network. Network upgrade goals are being met, and developers continue moving to ETH 2.0 in 2022.
Fundamentally negative could be the factor of tighter US authority’s position. The US is moving towards stricter controls, de-anonymisation of cryptocurrency users, and increased tax collection from this sector. On the one hand, one can rejoice at the greater transparency and reduced risks for investors. On the other, in the background of protecting market participants, many scenarios can be implemented that will eventually work against holders of digital assets.
At the very least, the US government’s immediate plans include raising taxes to fund massive support programs for the economy. The economy is showing long-awaited signs of recovery, and, likely, US authorities will soon begin to tighten their stance on all fronts at once, which will also affect cryptocurrencies.
The FxPro Analyst Team