Bitcoin recovers from the ‘Musk Depression’

Now that Elon Musk has apparently finished tweeting about Bitcoin, the general movement propelling cryptocurrency up is starting again.

Musk’s latest tweet showed “#Bitcoin“With a broken heart emoji and a reference to a text from Linkin Park’s popular song” In the End “:” I’ve tried so much and I’ve come this far; but in the end it doesn’t matter; I had to fall to lose everything; But in the end it doesn’t matter. “

Now the entire cryptocurrency industry is fervently hoping Musk can find another form of entertainment – they wish he had never heard of Bitcoin.

And Bitcoin rose again 13 percent to $ 37,176.44 from the previous day early Thursday morning and fell slightly to $ 35,700 on Saturday. Wednesday’s blow came from the Central American nation of El Salvador, which has decided to make it a legal currency. The original cryptocurrency hit an all-time high of $ 65,000 in February.

“Prices can now be shown in Bitcoin, tax contributions can be paid with the digital currency and the exchange into Bitcoin is not subject to capital gains tax,” says the law.

While this is an extraordinary development, there are more conventional forces driving Bitcoin back up, and many

“More significantly, Bitcoin has been steadily accumulating through larger institutional wallets and Michael Saylor’s microstrategy has increased the size of its current junk bond offering to $ 500 million to buy more BTC at that level. These will have a greater impact on macro hedge funds that will try to take advantage of the exit opportunities, “said Stephen Kelso, Head of Markets at ITI Capital, in a note.

“We may soon see a number of announcements of Bitcoin purchases from institutions like Facebook,” tweeted Ki Young Ju, CEO of blockchain analytics firm CryptoQuant. “Institutions have amassed bitcoin in the $ 48,000 to $ 60,000 range since February.”

For analyst Mike McGlone, senior commodity strategist at Bloomberg Intelligence, the logic is similar. McGlone believes that Bitcoin has hit rock bottom and will soon go up following a well-established pattern.

“Bitcoin Surrender? $ 40,000 seems more likely than $ 20,000, ”he wrote.

“The June 8 bitcoin slump and revisiting support below around $ 30,000 had many of the characteristics of the extreme bear market typical of more persistent bull market lows.”

Bitfinex CTO Paolo Ardoino told Bitcoin.com News that the current hiatus came as no surprise to him.

“This current market pause is not unexpected,” said Ardoino. “Everyone needs time to evaluate and digest what the community has built. We wait for a new momentum as we continue to build on the foundations laid by some of the fintech industry’s greatest minds. I’m still extremely optimistic about Bitcoin and the long-term fundamentals and use cases of the technology in the long run. “

However, analysts point out that Bitcoin will be tested at the $ 40,000 resistance level.

Élie Le Rest, partner at the digital asset management company ExoAlpha: “Traders still have doubts about where the market is going, so leverage has remained relatively low as forced liquidations have been painful since May. Breaking $ 40,000 could increase traders’ confidence to use their book again to hit new highs in the crypto market. “

Anthony Scaramucci, founder of Skybridge Capital, agrees that this Bitcoin decline is following an established pattern.

“The bull market is intact for Bitcoin. If you go through the various slides in Bitcoin over the past 12 years, this will coincide with these slides. However, at the beginning of the year you had a lot of lead time given all the expectations, but … most of the smaller players are using huge leverage. Think about the GameStop situation. … In the long run, Bitcoin is bouncing back, I think that’s an escape to quality in crypto, but if you look at the altcoins I think it’s good for crypto and Ethereum because they really got blown up. “

And despite Bitcoin’s price correction in recent months from its all-time high of $ 65,000 in April, signs of growing demand for cryptocurrencies from institutional buyers and brokerage firms continue to mount, writes Victory Capital, a Texas-based money manager, who said it plans enter the crypto market through a private fund for accredited investors that tracks the Nasdaq Crypto Index.

David Rubenstein, Co-Founder and Co-Executive Chairman of The Carlyle Group, also remains optimistic.

“I think it’s here to stay. Cryptocurrency won’t go away, just as gold won’t go away. Yes, it had its ups and downs and [Wednesday] wasn’t a good day for it, but that goes for anything that’s relatively new. … It’s here because the people in the market want something other than just the traditional currencies that we had, and whether that’s right or wrong, it’s clearly something the market wants. “

Technical analysis, which looks only at price movements, also shows that Bitcoin has hit a “bottom” at around $ 30,000 and is recovering from that point.

“The last three candle days have formed a perfect reversal pattern for the morning start. This could be the first indication that after the sharp decline since mid-May, which resulted in a loss of 50 percent, Bitcoin is trying to rebound and hit a temporary low, ”writes analyst Yaz Sheikh.

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