Bitcoin Tests $40K Resistance, Altcoins Await The Outcome Of This Battle
FxPro Financial Services Ltd | Jun 14, 2021 07:20AM ET
The crypto market is experiencing another phase of excitement following the positive decision by El Salvador's parliament to include Bitcoin in the country's official options of payment. It is hard to underestimate this precedent on a global scale, which is why we are now witnessing such strong positive price momentum. Investors, who until recently had been putting off their purchases, are entering the market.
Over the past 24 hours, Bitcoin has been adding 13% and changing hands for $39,500. Thus, the benchmark cryptocurrency is once again trying to rush the $40K threshold. The success of this test of local highs will define the short-term prospects of the crypto market as a whole. The total capitalization of cryptocurrencies in the last 24 hours increased by $126 billion. It is very likely that if the threshold is successfully overcome, we will see a new buying momentum, which will push the first cryptocurrency to the area of $42-$44K.
The altcoins are not yet catching up with Bitcoin in terms of positive sentiment, but there is always this time lag between the flagship and the rest. When the direction becomes unambiguous, altcoins often overtake the first cryptocurrency in either direction. For now, Ethereum (ETH) is up 8% and trading around $2,500, though the coin is still down 10% for the week. Other altcoins in the top 10 are also so far unable to offset the drop in the recent past.
On the positive side for Bitcoin, we can also note MicroStrategy's announcement of a $500 million coin purchase. This company remains consistently bullish on Bitcoin and is trying its best to give the first cryptocurrency a boost. It is hard to say how long the effect of such news can be, but we may well see a reversal of the price trend in combination with other positive news triggers.
There was also a post on Twitter by Elon Musk saying that Tesla (NASDAQ:TSLA) sold about 10% of its BTC assets to test the market's liquidity. While no one really doubts that Tesla's sales combined with Musk's statements about Bitcoin not being environmentally friendly caused the market to plummet, the Tesla CEO's further words may well be a major impetus to buy. Musk stated that if miners get 50% of their energy from clean sources, Tesla will resume accepting bitcoins as payment for its cars.
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Apparently, market manipulation continues. In the future, we may see more such statements in order to cause the market to move in one direction or another. The good news is that there are great opportunities for investors to get quick profits. For many new market participants, it will mean serious losses, but large capital gets another opportunity to create significant fluctuations in the market.
The FxPro Analyst Team
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