Bitcoin quotes, as expected, showed good growth in recent weeks. However, by the end of August the initiative in the cryptocurrency market passed to the bears, and prices returned to the initial positions. Here, Bitcoin again becomes interesting from the point of view of opening long positions, which is confirmed by the latest candles on the daily chart. Drawdowns to the level of 57 000 are bought out, discouraging sellers from increasing activity. In such conditions, there is a high possibility of a price rebound to the level of 61 000.
According to Bloomberg analysts, a steady increase in prices of cryptocurrencies is hindered by fears of growth of their supply in the market. Authorities in the U.S., China and some other countries received at their disposal Bitcoins totaling $33 billion after the bankruptcy of the Mt. Gox exchange. At the same time, officials have not publicly announced their intentions to sell the cryptocurrency, especially since its price is now significantly lower than the highs of spring and early summer. Even if mass sales of Bitcoin take place, it is unlikely to happen at current levels.
Meanwhile, assets of Bitcoin ETFs in the U.S. have already exceeded $52 billion. Market participants surveyed by Reuters expected to reach similar amounts only 5 years after the January approval of exchange-traded funds for cryptocurrency. In fact, it took less than a year. Moreover, these investments are almost entirely held by hedge funds and other professional asset managers. Retail investors have yet to take a significant share of this market.
But now this situation may change. At the end of last month, Morgan Stanley allowed financial advisors to offer Bitcoin ETFs to clients. Sui Chung, CEO of CF Benchmarks, believes this move is very important for popularizing the cryptocurrency market. In his opinion, the investment community will start allocating a certain share of portfolios to Bitcoin, effectively recognizing it as an instrument similar to other assets in the financial markets.
The Stochastic indicator has already signaled to buy bitcoin, increasing the possibility of a new wave of growth. The nearest benchmark for the bulls will be the level of 61 000.
Consider the following trading strategy:
Buy BTCUSD at the current price. Take profit – 61000. Stop loss – 57000.
This content is for informational purposes only and is not intended to be investing advice.
