The first cryptocurrency continued to grow on Tuesday, but could not overcome the $40,746 level. Thus, the upside potential for Bitcoin remains very limited. It is true that the cryptocurrency has recently grown by $10,000, but the fundamental background for it remains very unfavorable. Of the main positive news of recent weeks, only a message from Elon Musk can be distinguished, who admitted the return of the opportunity to buy Tesla electric cars for bitcoins, as well as news from MicroStrategy, which is going to invest another $500 million in bitcoin in the near future, which it raised by issuing bonds for a period until 2028. That's all. The negative background remains much more extensive. The authorities of some regions of China have already completely banned mining and asked all cryptocurrency mining firms to leave the country or cease their activities. The US authorities continue to consider the possibility of tightening the tax code, which will assume that all transactions in cryptocurrencies must be monitored by the US Internal Revenue Service. In addition, there are technical reasons why Bitcoin is unlikely to start forming a new upward trend anytime soon. One simple reason is the fact that the upward trend is over and it usually takes a year or two for Bitcoin to consolidate and correct after that. We also have the old forex adage "Past profitability does not guarantee future profitability." In our case, it can be rephrased as follows: "Any events in the past do not guarantee their repetition in the future." Thus, Bitcoin has a chance to form a new upward trend right now. However, everything so far looks as if the "bullish" trend is over, and the cryptocurrency has indeed gone into a long correction. Many "crypto experts" and billionaire investors continue to pour forecasts saying that Bitcoin will rise in price in the near future. However, we have been hearing predictions like these for 5 years already, and they do not mean that bitcoin will rise in price to high figures in the coming months or a couple of years. All of these projections are based on timing uncertainty. It is possible to say that Bitcoin will probably cost a lot someday, but is anyone willing to trade or buy bitcoin based on such a prediction? Moreover, we have seen a recent trend that the authorities of some countries of the world completely prohibit bitcoin or significantly tighten its regulation and circulation. In addition, the hopes for institutionalists, who, in theory, should have used the current "low" levels of value for new purchases of cryptocurrency, are not being justified yet. However, at the moment, Bitcoin is trading near the levels on May 20, and on May 19, quotes fell to $30,000. That is, the current levels, despite the growth of recent days, are still very low.
In technical terms, bitcoin failed to work out the support level of $30,500 again, but managed to raise it to the level of $40,000. Thus, despite breaking the downward trend line, it is now highly likely that Bitcoin is inside a sideways channel with an upper border just around the $40,000 level. Consequently, there is a high probability of a downward reversal with a new fall by 7-8 thousand dollars.
