Last week, the volatility in bitcoin increased sharply. On Thursday, the main cryptocurrency experienced the strongest daily drop since August. However, having seen the price drop by more than 4%, market participants began to actively buy back the drawdown. By the current moment, almost all losses have been neutralized, and the prices have returned to the area of local highs near the 37000 mark. Most likely, the next step for the bulls will be to break through the 38000 level and establish a new top of the current year.
The recovery in the bitcoin price was facilitated by yesterday's news. The U.S. Department of Justice and the world's largest cryptocurrency exchange Binance may conclude a settlement agreement by the end of November. In the context of terminating the investigation of the American authorities, the exchange will pay a fine of 4 billion dollars. Such a financial penalty will be one of the largest imposed by the U.S. government on a single company. Nevertheless, cryptocurrency market analysts believe paying the fine is the best way out for Binance.
Zaheer Ebtikar, founder of the Split Capital fund, estimates the end of the legal battle between the U.S. government and Binance as a major breakthrough. In his opinion, if the investigation is indeed terminated, the cryptocurrency market will receive a significant boost to growth. The surge of optimism may even surpass the effect of rumors about the upcoming approval of bitcoin ETFs.
Greg Moritz, co-founder and COO of cryptocurrency hedge fund AltTab Capital, has a similar viewpoint. According to him, Binance is not short of cash, and cryptocurrency industry companies have long been accustomed to a variety of fines. According to Bloomberg estimates, the exchange earned more than 20 billion dollars over the 2020-2021 period. Therefore, paying a fine of 4 billion is unlikely to seriously affect the financial stability of Binance.
The nearest growth target for bitcoin prices is the 38000 level. In the coming weeks, buyers can expect to reach the important 40000 mark, if there are no drastic changes for the worse in the fundamental picture of the cryptocurrency market.
Consider the following trading strategy:
Buy BTCUSD at the current price. Take profit – 38000. Stop loss – 36900.
Traders may also use a Trailing stop instead of a fixed Stop loss at their discretion
This content is for informational purposes only and is not intended to be investing advice.
