Bitcoin successfully bounced off $40k early last week and has since firmly settled in the $43k - $45k corridor. At the same time, the coin is in the stage of consolidation without claims to exit the current range of fluctuations. It is also worth noting the shaken confidence of long-term cryptocurrency holders, who staged a local sale of the coin in mid-September. The behavior of medium-term holders is also not encouraging, as the number of BTCs that has not moved in three months has reached a low since mid-2015. PlanB, who predicted a possible drop of bitcoin to $30k at the end of this year, also added fuel to the fire.
Crypto analyst PlanB has identified a scenario in which Bitcoin will fall to $30k at the end of 2021, according to the S2F price movement modeling algorithms. The speculation was made by the creator of the Stock to Flow model of bitcoin, who stated that if the price movement continues according to the time model, the coin will cost $30k. At the same time, the S2F model still expects to see the price of bitcoin in the $100k region. The Stock to Flow model is based on calculating the ratio of market supply and annual growth of a cryptocurrency. In other words, the main idea of this model is that the more scarce an asset is, the more valuable it is.
Despite some chaos from this statement, multiplied by the nervousness of the market, the issue of falling to $30k is being seriously discussed. Such a scenario should not be completely ruled out, but this is unlikely given the growing inflation, maintaining the current rate and other positive theses voiced at the Fed meeting. In addition, we should not discount the growing institutionalization of bitcoin and its gradual introduction into all spheres of life of ordinary people. Whales continue to accumulate BTC volumes, and the currency hash rate is setting new local highs. In October, an important Taproot update will start, which will also become an important lever in the investment attractiveness of the coin. The main fundamental and medium-term factors are entirely on the side of bitcoin, and therefore there is every reason to count on the growth of the asset by the end of the year.
If we consider a more local perspective, then everything looks more gloomy due to the next portion of the bans by the Chinese authorities. Due to the complete ban on cryptocurrency transactions in China and the persecution of Korean crypto exchanges, massive movements of bitcoins will begin, which will create a heavy load on the network of currency and platforms. This can be fraught with problems in the operation of the main network, as well as possible fluctuations in the value of bitcoin, which can provoke a sale. Right now, the cryptocurrency has recovered from falling to $40k and is in the stage of price consolidation. We should not expect sharp or systematic periods of growth in the near future since the main task of the coin is to stabilize the price. In the third quarter, this cycle should end and provoke active market growth in the final quarter of 2021. The most acceptable strategy for most players now is the accumulation of coins that consolidate at local lows.
Meanwhile, bitcoin continues to fluctuate within the local corridor of $43k - $44.5k, and over the past day, the price has increased by 5%. At the same time, trading volumes remain at an average level, and the asset itself is quoted at $43.5k. Bulls and bears arrange local battles, but it is impossible to significantly influence the price even against the backdrop of negative news from China and nervousness associated with Korean crypto exchanges. This indicates a stabilization of the price, and therefore soon we will start active accumulation of BTC.
On the four-hour chart, the coin looks weak, there are prerequisites for movement towards the lower border of the current fluctuation range. The RSI indicator started a downward movement, which indicates the strengthening of sellers' positions, and the stochastic formed a bullish crossover, but began to decline. A bearish divergence is potentially forming on MACD, but, most likely, the metric will also begin to decline after leaving the red zone.
On the daily chart, the situation has leveled off and bitcoin is confidently moving flat. The RSI and stochastic indicators are moving along the 50 mark, and the MACD forms the prerequisites for an upward movement, which is also fraught with divergence. Given the current performance of technical indicators, bitcoin will continue to move sideways with attempts to exit the current range of fluctuations. Taking into account the news background and the constant movements of coins due to problems in South Korea, breakout attempts are likely to be bearish, and therefore the probability of another retest of $40k increases.
