Recently, Bitcoin (BTC) seems to have returned. Earlier this week, it rebounded to the $40,000 range, but it quickly fell again. In fact, with the strengthening of the U.S. dollar, the new wave of new crown pneumonia infections and the sluggish transaction volume, many problems still hinder the recovery of the digital currency market. In fact, in the past few months, whether Bitcoin is destined to fall again or is finally ready to break new highs, it can be said that the cryptocurrency market has been in chaos. Through the analysis of the historical price of Bitcoin and various previous data, the current dilemma of the cryptocurrency, which ranks first in market value, may continue for some time. There are three main reasons:
1. The U.S. dollar strengthens 2. Decrease in economic stimulus 3. A series of technical factors related to Bitcoin trend Let's discuss it in depth below- A strong U.S. dollar threatens Bitcoin's recovery According to data analyzed by Delphi Digital, one of the factors that put the greatest pressure on global risk assets is the strength of the U.S. dollar. After the dollar fell below 90 at the end of May, it appears to be trying to reverse the trend. The rising strength of the dollar will also curb the rising trend of 10-year US Treasury yields, which reflects that the economic recovery in the first half of 2021 is losing momentum, and the new wave of new crown pneumonia epidemic has affected the global economic recovery. Fractals and death crosses indicate that the correction is not over yet Bitcoin's short-term outlook is still relatively pessimistic, because the "death cross" that appeared before (appearing on the Bitcoin chart in June) will usher in a correction period that may last for a year. According to the analysis of Delphi Digital analysts, the 12-month moving average is undergoing a support test. If it breaks below this level, it indicates that the price of Bitcoin will fall further. tr0HUrb6okloOZaCoUqWMa6xePC8qfessksnJUmm.jpeg 12-month moving average has historically been a key support level for Bitcoin, so the performance of the price near this moving average will determine whether the current upward trend remains unchanged. Generally speaking, traders still need to be cautious, because historically, low trading volume will lead to higher volatility, and the reduction of open auctions will lead to rapid price fluctuations. As Kevin Kelly, a certified financial analyst at Delphi Digital, explained, he explained: "If it falls below these key levels (close to $30,000), then the short-term outlook will become quite pessimistic. I don't think that the obvious withdrawal after December 2017, the beginning of 2018, and the end of 2018 will happen again. But I do. It is believed that, considering the structural problems of the market, we may encounter more volatility in the short term, and may even encounter more resistance." In fact, due to Tesla’s second-quarter earnings report and Amazon’s “hint” to enter the digital currency market, these seemingly positive short-term dynamics induced a rebound in Bitcoin-especially Tesla CEO Elon Musk, It is rumored that he changed his critical attitude before the release of the earnings report and sang a lot about Bitcoin and Dogecoin. At the event, he made it clear that "Tesla is likely to resume Bitcoin payments" and revealed that another company, Space X, also holds Bitcoin. According to estimates on the "Fortune" website, Tesla bought a total of 46,000 bitcoins, with an average purchase price of approximately $32,600. In April 2021, Tesla’s first-quarter financial report disclosed that it sold 10% of Bitcoin, or about 4,600, with an average price of $59,100. This transaction brought in revenue of $272 million for the company. As of the second quarter financial report, Tesla has not sold or increased its holdings of bitcoin since then, that is, still holds 41,400 bitcoins. After deducting the closed profits, its true cost should be $1.228 billion, which means its single currency The cost price is approximately US$29,661. One week before the financial report was released, the price of Bitcoin was close to $29,000, and it was about to fall below Tesla's cost line. It is undeniable that digital currency is still a relatively risky field, and we must treat it with caution.
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