Here's What Bitcoin Could Do This Week

No two ways about it: Bitcoin had a rough couple of days over the weekend.

After an eventful few weeks – including a monster Wall Street debut with Coinbase Global Inc.'s (NASDAQ: COIN) direct listing – cryptocurrencies stumbled at the end of last week.

The drop was pretty significant, and sudden, too.

But to put your mind at ease, I'm not worried about these reversals in the long run, especially not after seeing what the market did after prices dropped.

Let's go over the real story of what happened, one chart that shows where the buying opportunities are, and most importantly, where we're headed in the next few days…

After topping $55,100 on Thursday afternoon, Bitcoin and other cryptocurrencies began a steep slide that more or less didn't end until Sunday night. We've seen it rally back – hard – to over $53,500 as of midday Monday.

So, what happened? Well… the market got a double or even triple dose of international regulatory worries. That spooked enough people to start a sell-off.

For most of the last week, there were reports that Turkey was going to crack down on crypto altogether, but that's not significant.

For every $1,000 you could make with Bitcoin, this special trade could make you as much as $20,040 instead.

Here in the United States, investors were leery of word that the Biden administration would hike capital gains taxes to 39.6% for individuals earning more than $1 million.

That started selling across the entire market, and crypto sure wasn't immune. Bitcoin immediately fell 4%, while Ether and XRP tumbled 3.5% and nearly 7%, respectively – and yes, even Dogecoin fell about 20% when the news hit.

I think most seasoned investors – including crypto investors – have seen something like this coming since the 2020 election. Biden was probably going to raise corporate and capital gains taxes no matter what. I've got to believe a lot of that expectation has been baked into the markets already – there's just no surprise. And the fact that the selling in the broader markets was fairly shallow, followed by a sharp rebound yesterday, strongly suggests what we saw wasn't panic but a little good old-fashioned profit-taking.

An even bigger hit, though, came from all the way across the world, in South Korea.

Now, a lot of folks don't quite understand how big Bitcoin and crypto are in Korea. They're incredibly popular there – so popular that Bitcoin usually trades at a high single- to low double-digit premium on Korean exchanges like Bithumb or Korbit; the price you'd be quoted on Korbit could be as much as 15% higher than you'd be offered on, say, Coinbase.

Some investors there have figured out ways to profit from arbitrage, trading on the difference between Korean crypto prices and the rest of the world's. (By the way, I sure wouldn't recommend trying that.)

That's why it was a globally big deal when Korea's Financial Services Commission chair, Eun Sung-soo, said Korean crypto exchanges could all be "shut down by September." Within minutes, prices of all kinds of cryptos had taken a hit worldwide.

Here's the thing, though: A lot of investors heard the "shut down in September" part and freaked out without listening to what Eun really had to say – which wasn't all that bad.

Korean financial and anti-money laundering regulations are some of the stiffest in the world – and they have strict capital controls in place, to boot. Eun was talking about a new law that says Korean crypto exchanges have to submit a Virtual Asset Service Provider application by September 2021. If they don't submit the application, they could be shut down. The important part there is the "if." Local crypto exchanges have until Sept. 24 to apply, and so long as they comply with the government's tight anti-money laundering rules, there's no reason they wouldn't be approved. There are reports that some of the biggest, like Bithumb, are already preparing to apply and getting their regulatory affairs in order.

Three tiny digital coins are gearing up for a rally. One trading for around $12 could deliver a 638% profit by the end of 2021.

I'm not worried – I think the applications will come. Just like Coinbase's arrival on Wall Street is a good thing, I see the Korean requirements as a good thing in the long run for one of the world's most important crypto hubs and good for the entire global crypto market. Anything that increases confidence and mainstream acceptance is bullish at the end of the day.

And by Bitcoin's price action over the past 24 hours, it looks like a lot of other investors see it that way, too. We saw a huge move up Sunday night into yesterday morning, but that hasn't stopped some pundits from trying to draw scary comparisons…

Here's Where Bitcoin Goes Next
Back in early 2018, after Bitcoin's big run up to $20,000, prices crashed… and then they cratered. There was next to no institutional money in play, and, from a technical perspective, next to no support; there was no floor for Bitcoin to hit until it fell 65%.

Bitcoin has had some significant declines this winter and spring, and just about every time, naysayers point to the 2017 crash as something that "could happen all over again." There were even one or two talking heads who beat that drum over this past weekend.

That's just not the case. Bitcoin is much stronger now. Back in 2017, you couldn't use Bitcoin with Visa Inc. (NYSE: V) or on PayPal Holdings Inc. (NASDAQ: PYPL), and virtually no institutional investors had big positions.

The situation in 2021 couldn't be more different. After a steep decline, Bitcoin found the floor – above $47,000 – quickly, just as it has after every other recent sell-off. The rebound has been convincing, moving all the way up to more than $53,500 yesterday afternoon.

If you take a look at this screenshot from my livestream yesterday afternoon, you'll see Bitcoin's Fibonacci retracement levels, which line up pretty nicely with what actually happened. We got two great buying opportunities.

Now, we may not see Bitcoin really resume its powerful rally for a few days yet, but that's a textbook consolidation. Every minute Bitcoin spends at these levels is just more fuel for the rocket higher.

At the end of the day, this doesn't change my outlook that Bitcoin might hit $75,000 by Labor Day or $100,000 by the end of 2021. We're going to see significant drops in Bitcoin and the other cryptos from time to time on the road to $100,000 – and full mainstream integration. An informal study from Dailycoin showed that 112 of the 505 stocks on the S&P 500 were more volatile than Bitcoin in 2021, and we're still seeing lower volatility than its ill-fated 2017 bull run. Folks who "HODL" and add more at or near key Fibo levels like in the chart above should continue to see big gains.

And I'm not just talking about Bitcoin, either; the entire cryptocurrency market could do very well this year. Its performance so far has been incredible. Thing is, when you drill down and look at the smaller, lesser-known coins – I call them "microcurrencies" – the performance can potentially be even better. Some of these are beating Bitcoin by 30x, 50x, even 100x in the last 30 days. In fact, I'm projecting that a $14.2 trillion boost could produce staggering windfalls over the next four years. Take a look…

Sourse: moneymorning.com

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Category: News | Views: 65 | Added by: danyagames2007 | Tags: #Bitcoin #Bitcoin Price #BTC | Rating: 0.0/0
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