Bitcoin set a new all-time high, overcoming technical and psychological levels. $60K has long been a very desirable price level for most crypto market participants. The new historical high was at $61.5K, after which Bitcoin began to correct, rolling back at some point below $55K, where it is still getting support from buyers.
The benchmark cryptocurrency will have to go through a consolidation process and possibly a few more local corrections. Sellers’ pressure at levels above $60K promises to be quite strong, although so far, there is little reason to doubt further purchases due to increased interest in the sector from companies and funds.
The move to new all-time highs over the weekend was probably speculative on the part of retail investors. Last week ended near the highs, so new buyers had little trouble pushing BTC up. However, the new working week started with a more than 10% correction.
How long will the buyers stay in the market? The support program means Americans will once again get money from the government into their accounts. Another $1400 check is one more reason to speculate that U.S. residents will have some free money to invest in stocks and cryptocurrencies.
Thus, we can assume that the rally is not close to the end and will still show a number of historical highs. The next important point of resistance could be $70K, but we should also expect that the markets will face crucial tests in the coming weeks.
Greed has its limits too, and very often, it intensifies before a wide sell-off. The crypto market in general and Bitcoin, in particular, show a very strong correlation to the high-tech sector. During the last 12 months, it was this sector that showed the main growth, but it cannot last forever. Sooner or later, investors will start to pay attention to other stocks, not only tech, and the strategy will become more long-term and less speculative.
As the global economy recovers from the lockdown, other industries may take priority. This point may be the beginning of a trend reversal in cryptocurrencies.
The FxPro Analyst Team