Bitcoin Analysis. BTC has to Surge, Here is Why.

This year Bitcoin had the second best performing March ever in the history of Bitcoin, the first was 8 years ago when Bitcoin gained 178.70%. Overall, the first quarter of 2021 was Bitcoin’s best quarter in terms of gains. However a massive sell-off which started on March 24 played havoc with the bullish hoping investors. The sell-off was mainly caused by the end of the Bitcoin futures contracts and options.

Speaking of futures, CME will be launching Bitcoin micro futures this May, which should attract retail investors to the exchange. The BTC micro futures contract will be only 1/10 of the original notional value of BTC. The launch of the BTC micro futures is scheduled for May 3 after the settlement of BTCCJ1 futures and options on the exchange. This move from the CME group might be backed by the fact that Bitcoin inflows from retail investors in Q1 2021 outnumbered the inflow from institutional.

Bitcoin and cryptocurrency payments are being accepted by more and more companies, airBaltic, the first airline to accept Bitcoin payments, has announced that it will expand the cryptocurrency payments and will add Ethereum, Doge, BCH. PayPal enables cryptocurrency payments in millions of stores. As Bitcoin’s transactions increase so does the Bitcoin’s hashrate, and it just hit a record high with more than 166.4M TH per second. The hashrate and the price are strongly correlated, as miners expect a higher reward for the higher computational capacity provided by them. The previous ATH of Bitcoin’s hasrate was on February 9, 2021 when BTC/USD hit $48 142 setting a new high, and after a slight correction set a new straight uptrend, which continued up to February 21 and halted at $58 352. With that being said it is estimated that Bitcoin is entering into a new bull cycle and a new heavy correction based on miners sentiment is expected. Verdict, Bitcoin is bullish.

There issue of Bitcoin polluting the environment due to it’s PoW (Proof-of-work) mechanism remains, and when the number of Bitcoin transactions rise, so will the power to maintain the network. Carbon footprint of Bitcoin is heavily discussed and could force miners to work on safer and carbon neutral Bitcoin mining farms. Such a requirement will force smaller players to leave the mining and larger institutions to invest in clean energy. The state of Kentucky in it’s “Incentives for Energy-related Business” program proposes tax incentives for miners using clean energy for cryptocurrency mining.

First to step in into the carbon free Bitcoin movement are Argo Blockchain and DMG Blockchain Solutions, which have signed a memorandum of understanding to build the first carbon-neutral mining pool. The pool will be powered solely by the hydroelectric power, which has lesser emissions. This is to avert fears of Bitcoin getting banned due to its carbon emissions. Stricter regulations – yes, increasing scarcity – yes, increasing investment – yes, ban – no. This could be a good opportunity for developing countries that have great water resources to invest into providing clean energy for the evolving cryptocurrency industry. Verdict, Bitcoin is bullish.

As for the chart analysis, Bitcoin resumed uptrend after a sell-off of March 24. BTC/USD on Overbit is currently traded at $57 626 and is above the dynamic resistance of March 14 and the current All-time-high at $61 677.

Bitcoin’s uptrend was rejected by a strong resistance at $59 280 yesterday, the drop continued today until BTC tested the dynamic resistance and support and retraced. There are two scenarios to watch for the upcoming price action.

The first is – Bitcoin bulls do not get enough momentum and bears bring down the price to the support zone at $54 450 – $54 100 levels, where bulls regain power to push the price upwards, forming a perfect Inverted Head and Shoulders pattern and testing the MA200 as support. This scenario is supported by RSI and MACD indicators,

The second, bulls push the price upwards break above the $59 290 resistance and Bitcoin tests $62 300 and sets a new all-time-high at $65 000. This scenario is supported by the current price action and the last candle formed on a 4H chart. The candle reads that buyers are not giving up and were able to push the price higher. The current price is also above the dynamic resistance and above EMA50 and MA100.

It is important to note that the confirmation of the bullish continuation will be signalled by closing above the $59 290 resistance.