The value of the first cryptocurrency continues to decline after it failed to gain a foothold above the important mark of $50 thousand on August, 23. On the morning of September, 1, the price of bitcoin on the Binance crypto exchange went down to a rate of $46.839 per asset.
Bitcoin’s market capitalization has once again dropped below $900 billion and currently stands at $885 billion with daily trading volumes of $34.7 billion. The overall assessment of the cryptocurrency market remains above $2 trillion, the share of Bitcoin is 42.3%.
This week, the well-known analyst, creator of the Bollinger Bands indicator, John Bollinger, warned cryptocurrency holders that they should closely monitor quotes with the BTC calculator. The trader advised long-term investors to hedge themselves and fix some of the profits. The man also said that a possible further decline in the price of bitcoin can be used for additional purchases.
One of the main reasons explaining the fall in the bitcoin rate last week was a statement by David Marcus, head of Facebook Novi. In an interview with Bloomberg, the man mentioned that the company was not considering using bitcoin as a means of payment but considered it a good investment asset. According to Markus, the high volatility of the main cryptocurrency makes it impossible to use it for making payments.
Also, the head of the Facebook Novi division (a division of Facebook that develops the eponymous cryptocurrency wallet) noted that the company is considering using non-fungible tokens (NFT) instead. He also said that the development of Novi has already been completed, and the crypto wallet will soon be launched to the market.
Against the background of the decline in the bitcoin rate, the quotes of other digital coins went down as well. In the last week of the summer, the value of some altcoins has been declining:
- The price of Ethereum dropped by 3%;
- The value of the Solana token fell by 6%;
- The rate of the Luna token fell by almost 7%.
This happened against the backdrop of a fall in bitcoin quotes. Analysts believe that in order to be able to talk about a reverse global trend, Bitcoin needs to gain a foothold above $50-51 thousand. Growth to current levels is still within the framework of the correction of the ongoing bearish trend. It is too early to talk about the final reversal. And experts also believe that in the coming weeks, Bitcoin can be expected to roll back to $44 thousand, which will provoke a correction of altcoins by 10-15%. This will most likely become a good entry point for a new trend on the market.
At the moment, the change in the bitcoin rate to $45 thousand and below is less likely than its continued growth to $58.8 thousand, given the driving force of the trend and the obvious demand for an asset from both small and large investors. This demand is most likely to drive the uptrend target.
If we talk about the possible reasons for the corrective movement, then we can note a decrease in the size of stimulating measures on the part of global financial regulators, whose purpose was to support the economies of developed countries. This provoked a rise in inflation rates, thus, making investors consider bitcoin as a tool to protect against it.
The continued growth of Bitcoin seems to be the most logical continuation of the price dynamics of the cryptocurrency. However, it is not so easy. The driving force of a trend is always stronger than corrective movements until the trend target has been reached. At the moment, the closest target for Bitcoin is $58.8 thousand. The rate can also rise to the level of $63.5 thousand, which is the final resistance level on the chart at the moment.
Taking into account the restoration of the main cryptocurrency to $50 thousand and the growth of its hash rate, the coin has the chance to update its all-time high level by the end of this year. Also, investors who are currently buying bitcoin, have a yield potential of 30-40% by the end of the year.
Right now, it is worth investing in bitcoin in the long term, according to many analysts. The value of cryptocurrencies for the financial system of the world and their popularity will grow in the future. Thus, in a couple of years, cryptocurrency will be a generally recognized means of payment all over the world. As long as the global economy is dominated by a policy of low interest rates and monetary stimulus, it is reasonable to expect the upward trend of anti-inflationary assets to continue.