The BTC price has almost hit a new record high, settling at $40,500. The leading cryptocurrency rose by more than 7% this weekend, approaching its all-time high of $42,000, recorded at the start of January 2021.
Last week, Elon Musk provided active support to cryptocurrencies, tweeting about digital coins, including BTC. On top of that, Musk shared memes about dogecoin, boosting the cryptocurrency.
Many experts have lashed out at the tweets. They believe that this causes sharp fluctuations of digital coins. Many regulators have also stated that high volatility of cryptocurrencies can lead to a complete loss of funds, warning investors to abandon risky investments. In the light of recent events, demand for e-cash skyrocketed both among private investors and hedge fund managers, causing additional risks in case of the price decline. Nigeria's central bank has ordered banks and other financial institutions to close all accounts engaged in cryptocurrency trading. According to the regulator, this poses threats to the financial system of the country. According to the bank's announcement, it was a necessary measure that would help save Nigeria's population from risks related to cryptocurrency trading. Another reason for blocking clients' accounts was the fact that digital coins are used for money laundering and terrorist financing.
As for bitcoin trading, a breakout at 37,900 and a retest of this level will indicate the strengthening of the cryptocurrency. The price may test the annual high and even reach a new one if trading is above 37,900. Then, everything will depend on support for the new historic highs. However, I would like to warn investors against buying bitcoin at the highs, since it is possible that a significant correction will begin in the near future, namely in the spring of this year. Similar correction occured at the beginning of 2018. If BTC is below 37,900, it may plunge even further. In such a case, the closest support for the price will be the 33,300 area. Below this level, strong bullish activity may be observed only in the 28 900 range.
Dogecoin
An interesting story happened with dogecoin last week. Musk's tweet about dogecoin boosted its price to a new all-time high. Recently, the market capitalization of the token have soared to $10.5 million for a brief moment. As a result, the coin entered the top 10 cryptocurrencies by market capitalization.
In a few hours, American rapper Snoop Dogg joined Musk in tweeting a meme about Shiba Inu, mentioning @elonmusk. Consequently, the price of dogecoin only surged.
Ethereum
There is also good news for buyers of ether. The Chicago Mercantile Exchange (CME) officially launched a futures contract on ether today. The decision came in the middle of January 2020. Trading in ether futures went live on Sunday, with the February contract registering an opening price of $1,669.75. At the same time, the price in the spot market was approximately $1,600. The world's first ether futures will become a good investment tool that will help attract even more institutional investors. Consequently, it will only increase the market capitalization of the second largest cryptocurrency.
As for the technical analysis of ETH, the digital coin consolidated above the 1441 range. The main task for byers was to keep the instrument above the new support of 1484. If the price breaks through the resistance level of 1760, which is also the historic high, it may well rise to the psychological level of 1800 and 1850.
Demand for ether will only increase. Many investment funds will perceive ether as a new investment instrument with a high deflationary potential after adding the futures. This will make ether even more attractive compared to other cryptoassets.