Fundamental analytics

Bitcoin - a pullback to the support zone $7750 is a positive signal and a test for an upward impulse

Cryptocurrencies

Bitcoin digital currency comes into the new trading week above a significant level of $7,750. Not long ago, this level was resistance, and now acts as a strong support. As we expected last week, the bulls could not immediately develop an upward impulse in the $8,500 zone - the resistance level of 38.2% Fibo, there was a pullback and today, closer to the beginning of US trading session start, Bitcoin traded at $7,925.

The return of the market back to life and the return of interest occurred on April 12, when Bitcoin soared more than 1000 dollars within a one-hour candle. The intraday trading volume of the digital market has sharply grown, and according to the data of the Bitcoin registry (blockchain data), more than 35 thousand coins have been traded.

So, what could cause such a powerful growth in the market? There is still some element of mystery in this respect, and no one knows for sure, because no news worthy of such a price action has appeared. In addition, there was an assumption that there was a large-scale close of shorts, opened earlier. And although this version is quite plausible, we would like to hope that we have all witnessed a large long-term institutional purchase, a large volume entrance to the digital market.

April tax payments in the US, possibly, may have caused the last stage of Bitcoin's decline. Bitcoin increased by more than 1000% last year, and many other cryptocurrencies had an increase in hundreds and thousands of percent. Thus, the taxable profit was probably greater than expected by many market participants, which may have led to an increase in sales in the first half of April.

So, will pessimism persist in the market, and we will see a new decline? Of course, this remains to be seen, but as is known from market history, often extreme market levels very quickly give way to opposite sentiments and generate new medium-term trends.

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