Bitcoin saw a huge dip after Joe Biden made a proposal to increase the capital tax gains to over 39%. This had a huge impact on the market as most of the profits anyone makes will go to the government. And in a market that as new and risky as crypto, it is not a viable option for almost anyone. Many investors panicked after the news, and after huge dumping and Bitcoin losing $300 bn in market share, it finally crosses $50k again as losses slowly recover.
Bitcoin bull run continues as it crosses $50k again!
If you follow the daily chart of bitcoin closely, a pattern has been formed that shows it consolidating every month. This shakes off weak hands and creates more room for the price to grow in the future. Yes, this time, the dip was a little more, but that was because of the wrong news at the wrong time. Bitcoin even moved below its 100 and 50 day moving averages but managed to recover from that too. Even other currencies took a huge plunge after the news, but yes, this is sure that the market is now in recovery mode.
We have to take into account another fact that is essential for the bull run of Bitcoin. It is the $52k resistance and support level. If the currency can climb up this and manage to take it as support, then the price will rise really fast. As of now, the price has been dropping after reaching $51k because of this sole reason. The continuation of Bitcoin’s bull run is very important for Ethereum and other altcoins too. Most of the time, the crypto markets move as a whole, and if Bitcoin rises from here, other coins will also do well.
Even analysts are positive about it.
Most of the big analysts and investors recognize this as a clear correction that happens every month in Bitcoin. There is also an important point to this. Last month BTC made a downside of $44k, and if that breaks in this month’s low, it could be a sign of weakness, but otherwise, we are good to go. Another thing to note is that even though the market reacted to the tax proposal news harshly, it is improbable to pass it as a law.
It seems unlikely that the price of Bitcoin will consolidate beyond these levels. But if it does, then $40k could be on the charts. Technical indicators show that Bitcoin is oversold, and this suggests a near-term quick price rise if things go right. Bitcoin is still following the trend line, and only if that breaks is there a possibility for a huge downfall which we might not be ready for.
What do you think about the recent price increase of Bitcoin after the dip? And did you HODL or sell your coins in panic? Let us know in the comments below. Also, if you found our content informative, do like it and share it with your friends.