Bitcoin has witnessed a massive bull market this year fueled by the confidence of investors. Shortly after hitting $64,800 on April 14, Bitcoin then corrected, losing nearly 10% in just three days.
The assets that investors sold to avoid their losses also caused panic in the market. By May 19, Bitcoin had dropped by about 55%. Among all cryptocurrencies, there was a regressive pull as a result. This drop has smashed the entire crypto market from $2.2 trillion to just under $1.5 trillion.
Bitcoin continues to struggle between $29,000 and $40,000 with no clear sign of direction since May 19. The big problem continues in the market; when will we break out of this range for another bull rally?
Figure 1. Bitcoin price analysis
Although Bitcoin seems to have already bottomed out at $29,000, it doesn’t mean it won’t drop further. Changing conditions in the overall crypto market favor the possibility of a price breakout.
There are also views that the price could drop to $20,000 before continuing the bull rally. Some large institutional investors, like George Soros, with high net worth, showed their interest by buying Bitcoin.
Elon Musk’s Tesla bought $1.5 Billion worth of Bitcoin in the first quarter of 2021. One of the biggest investors, Microstrategy, bought $2.1 billion worth of BTC, and Square, which bought $220 million worth of BTC, is one of the recognized investors.
El Salvador became the first country to legally accept Bitcoin in June, expressing confidence in its potential to keep the country’s economy stable and to foster financial inclusion and investment. In the future, it is thought that there will be more countries or institutions that start to recognize BTC, considering that its value will continue in an uptrend.
Being calm and patient when prices are moving sideways is a great strategy when considering trading. Sometimes not trading at all is a better strategy. The best option for now should be to wait for the price to drop to both sides of the range before we can get a clear direction. A break and close above the $41,500 level could push BTC into another bull rally.