Bitcoin´s price still unable to reach $40,000 despite strong rebound in 'cryptos'
By Noemi Jansana / Alejandra Zamora
Date: Tuesday 01 Feb 2022
(Sharecast News) - There is a strong rebound in the cryptocurrency market that started in February, offering hope to market operators that the price of Bitcoin will return to figures above $40,000 sooner rather than later. All in all, the 'altcoins' that shine brightly during the early stages of the month, while the queen of cryptocurrencies does not seem able to shake off its recent trading range and remains below the highs of January 26th, almost at $39,000, when it rebounded from the lows of January 24th, at $33,000.
Meanwhile, positive signs in the short term are overshadowed by a combination of negative news and concerns looming over the digital currency par excellence. The price range in which the crypto currency moves has been narrowing in recent sessions and Bitcoin has remained above $36,500 for three consecutive sessions. Also, it has been closing around $38,000 for three days, with a high on Monday, January 31st, at $38,500, in round numbers, the best price at which it has managed to end the day since January 20th.
From a technical analysis point of view, the price is creeping towards the important resistance zone, formerly support, of $40,000-$40,200. However, until it clearly surpasses it, experts point out that the digital currency will not be out of danger.
The shutdown of cryptocurrency miners in Kazakhstan is expected to end in February, according to reports. The state electricity provider, KEGOC, blamed mining, which is the computational process that maintains the blockchain, for the major outage that took place in the country. Also, Armenia is making an old thermal power plant available to this industry. The old plant will be leased to industrial companies that wish to use it for cryptocurrency mining.
However, a series of adverse developments continues to weigh on the mood of investors who are extreme in their caution, while a regulatory avalanche is expected to scare away more participants. Meanwhile, volatility is also acting on institutional traders, who are unwinding their positions and making predictions, while catalysts for rallies are scarce. Without going any further, JP Morgan has revised its long-term forecast for the queen of cryptos and has lowered its target price to $38,000 from the $150,000 it was previously betting on.
One of the main concerns, undoubtedly, is the new regulations governing digital assets. The Russian government is currently leaning toward regulating cryptocurrency markets rather than banning them altogether (as proposed by the central bank). The country's president, Vladimir Putin, stated that he supports cryptocurrency as it provides Russia with a competitive advantage in this field. Also, credit rating agency Fitch warned that a ban on cryptocurrencies may stifle innovation and negatively affect the technological development of Russian banks.
There has also been speculation that US President Joe Biden's administration will issue an executive order on this market on February. Speculation suggests that cryptocurrencies are viewed as a national security threat by the US administration. Biden's approach may be the key to Bitcoin and other cryptocurrencies recouping losses. Also, apart from 'cryptos', NFTs (non-fungible tokens) are also expected to be regulated.
ETHEREUM AND OTHER TOKENS RALLY
All these concerns seem to have been put aside by traders when it comes to 'altcoins'. Ethereum has scored a 10% rally in the last 24 hours and extended its 10-session highs, eager to attack $2,800 and then $3,000.
Other tokens that have had a tough time of late are also recovering. The Terra project coin, LUNA, gives up a nearly 20% rally and regains its position in the top 10 coins by market capitalization. This token had suffered notable losses due to the Wonderland decentralized finance project scandal, which had dynamited its price. For other coins, the 15% increase in Solana and a 10% jump in Polkadot stand out.
The global cryptocurrency market capitalization is up more than 5% to $1.76 trillion.
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