FX.co ★ Shares of companies associated with Bitcoin will also decline

The first cryptocurrency in the world tried to start a new round of upward movement inside the side channel $31,100 - $40,700 on Wednesday. But by the end of the day, the quotes returned to their original positions, and today, they are moving down altogether. Thus, today the level of $31,100 can be worked out once again, which, we recall, is not only the lower border of the channel, but also an important level of support, which so far protects bitcoin from a new collapse. However, from our point of view, this level will still be overcome, possibly, in the near future. The problem for bitcoin is the same. It has a very weak fundamental background. We have repeatedly said that the Chinese authorities continue to tighten regulation of the cryptocurrency sphere. In the 4 regions of the country, mining is already completely prohibited, and experts expect that by autumn up to 90% of China's miners will leave the country or cease their activities. In addition, Beijing has banned all banks and financial institutions from providing any services related to cryptocurrencies. On the other side of the scale, the only positive news are the legalization of bitcoin by El Salvador and new purchases of MicroStrategy coins. The balance is clearly not in favor of positive news. In addition, the markets are now clearly awaiting news from the United States, where in the near future several bills may also be passed that will tighten the sphere of bitcoin and other cryptocurrencies. In particular, the Joe Biden administration proposes to impose income tax on transactions with cryptocurrencies, as well as oblige all cryptocurrency companies to transfer information on transactions over $10,000 to the Internal Revenue Service. Thus, it is the States that can deal another blow to Bitcoin, from which it may not recover for a long time. We believe that the chances of overcoming the $31,100 level are now very high, so Bitcoin may well continue to move down. And along with it, the shares of companies that are most strongly associated with bitcoin may continue to fall. For example, shares of MicroStrategy, which recently bought bitcoins for another $500 million and is going to raise another $1 billion by selling its own shares in order to invest this money in bitcoin, are now trading at $553 apiece. And in mid-April, at its peak, the price was $881. Coinbase cryptocurrency exchange shares, traded on NASDAQ, currently cost $226 apiece, although at the very beginning of the listing just a month ago they were trading at $380. The shares of the cryptocurrency trading bank Galaxy Digital are now at around $16 per share, although it reached $37 in mid-April the price. Thus, bitcoin is not only getting cheaper, it is also pulling down the shares of those companies whose activities are now firmly associated with bitcoin among investors.

In technical terms, bitcoin fell to the support level of $31,100 and to the previous local low of $29,700, and is still not far from them. Formally, the price can already turn up and start a new round of movement to the upper border of the side channel - $40,700. However, it looks like Bitcoin is aiming to break the $31,100 level. And the consolidation of quotes below the level of $31,100 may signal the readiness of the cryptocurrency for a new fall. Many cryptocurrency experts are in favor of the main cryptocurrency continuing to fall in price and may fall to $19,000 - $24,000 per coin. Some even predict the figure of $10,000.