Blog article
See all stories ยป

It is too Early to Talk about the End of the Correction

The value of the main digital coin again stormed the mark of $52K, although on Sunday it dropped to $43K. What news was the reason that the value of the cryptocurrency fell and recovered, and how much it can grow in the near future.

On Wednesday, March 3, Bitcoin quotes on the Binance crypto exchange again approached the mark of $52K. At the peak, price reached $51.7K, as of 14: 00 Moscow time, the first cryptocurrency is trading at $51.4K, over the past day it has risen by 6%.

The value of Bitcoin is recovering after the fall of last week. On February 21, the price updated the historical high at above $58K, after which it began to decline. On Sunday, February 28, the quotes fell to $43K.

The drop occurred against a negative news background. For example, two days before the start of decline, analysts at the US investment bank JPMorgan in a note to clients called Bitcoin the worst way to hedge. They explained that large investments in cryptocurrency increase its correlation with cyclical assets, which makes Bitcoin less attractive for portfolio diversification.

Also Bill Gates criticized Bitcoin. He said that the first cryptocurrency consumes too much electricity, and, as result, harms nature. According to Gates, transactions in the Bitcoin network require more energy than any other method of payment.

Charlie Munger, the Vice Chairman of the Board of Directors of Berkshire Hathaway and a long-time colleague of Warren Buffett, noted that he would never buy Bitcoin. According to Munger, the first cryptocurrency is an "artificial substitute for gold", and since Munger has never bought gold, he does not plan to buy Bitcoin. The investor concluded that BTC will never become a full-fledged payment instrument due its high volatility.

At the same time, at the end of February, the large movements of cryptocurrency from address to address were fixed. Traders mistakenly associated them with the mass desire of large holders to sell Bitcoin, so they began to sell the asset, pressuring its quotes, explained cryptanalyst Willy Woo. According to him, in fact, transactions were done on internal addresses that belong to crypto exchanges to ensure the security of customer funds.

Against the background of these events, the price of the first cryptocurrency dropped to a local low of $43K, but quickly rebounded from it and returned to growth. Already on March 1, the value of the coin became $49.7K, on Tuesday it rose above $50.2K, and on Wednesday it reached the maximum since February 25 at $51.6K.

The growth of quotations was fueled by such news as the additional investment of Microstrategy in the first cryptocurrency for $15 mln. The number of coins under the management of a public company has reached 90.8K. It has invested over $2.1 bln in Bitcoin.

A positive impact to the price of the coin could have the news that the customers of the Japanese corporation Rakuten, specializing in online retail, got the opportunity to spend Bitcoins and other cryptocurrencies in thousands of retail outlets. CoinDesk sources reported that PayPal is preparing to buy the Curv custodial service for storing cryptocurrencies.

It is worth mentioning that the news background formed by the media, various Internet portals, thematic forums, statements of famous personalities affects the mood of traders, forcing them to buy or sell crypto assets. In such a way the trend direction is created. Therefore, it is necessary to monitor the news in order to recognize the signals that help to correct a trading strategy in time and minimize losses, or on the contrary, not to miss the chance to get a good profit. FXOpen offers all kinds of support to traders, providing relevant news and market analysis on a daily basis. React quickly and let the luck be with you!

a member-uploaded image
7608

Comments: (0)

Greg Nilson

Greg Nilson

Financial Analyst

FXOpen

Member since

24 Jul 2018

Location

Charlestown

Blog posts

13

This post is from a series of posts in the group:

Cryptocurrency Insights

Trading crypto insights from the heart of the industry - the platform that delivers solutions and liquidity to institutions.


See all