The price of Bitcoin has rebounded strongly since Sunday. The leading cryptocurrency has gained nearly 20% since Sunday and about 35% over a week.
The exact cause of this rebound is uncertain, but most observers seem to agree that Bitcoin has benefited from comments by Elon Musk and Jack Dorsey and the rumor (denied on Monday) that Amazon is about to accept Bitcoin for payments on its platform.
The Tesla CEO not only announced that Bitcoin was likely to be accepted again by his car company, but that Bitcoin, Ether, and Dogecoin were still among his personal investments.
Jack Dorsey, the CEO of Square and Twitter and a strong supporter of Bitcoin, touted crypto-assets as “hope” for “world peace” and a better solution to the current banking system.
Some observers also believe that Beijing's regulatory moves this weekend toward the technology, education, and real estate sectors have pushed some investors toward the decentralized currency.
From a technical perspective, BTCUSD reached the first bullish target at $40k of the shared buy strategy last week. The outlook is bullish, but the risk/reward ratio no longer favors buying at the current price level.
Indeed, Bitcoin has returned to test major resistance at $40k. Bitcoin will have to break through this resistance, as well as its former January resistance at $42k, to have a return-to-risk ratio that is again attractive for buying. Below resistance at $40-42k, the risk/reward ratio favors sellers.
(Chart Source: Tradingview 29.07.2021)
Breaking through this resistance zone would therefore allow bullish strategies to be put back in place. The next resistance to watch would be the former support at $47k broken in May, then the historical high recorded in April at about $65k.
Disclaimer: This material has been created for information purposes only. All views expressed in this document are my own and do not necessarily represent the opinions of any entity.
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