The collapse of cryptocurrencies last week coincided with the proposal of the Central Bank of Russia to ban cryptocurrencies.
World experts do not believe that it was Russia that influenced the market. But now cryptocurrencies began to rise just after the Russian Central Bank issued some clarifications. Another one coincidence?
The bitcoin rose by 10% in a day and exceeded $37K after the Russian authorities denied the info about a possible ban on cryptocurrencies in the country. No serious analyst considers the “Russian factor” important for the cryptocurrency market, although the Russians hold about $92 billion worth of cryptocurrencies, according to Bloomberg.
However, two coincidences in a row make you wonder. Is the contribution of the Russian Federation to the crypto industry not big enough? In any case, now the Russian authorities have stated that this is not about banning cryptocurrencies in Russia, but about their regulation. And the market returned to growth.
Perhaps Elon Musk also influenced the market again. This time, the super-entrepreneur suggested accepting Dogecoin (DOGE) memcoin at McDonald’s restaurants. Musk tweeted:
– I will eat a happy meal on tv if @McDonalds accepts Dogecoin.
DOGE rose immediately by 15% after that. Previously, Musk’s favorite coin plummeted after reports appeared in the media that Dogecoin could be recognized by regulators as an unregistered security.
As for the broader market, clear signs of recovery have appeared. According to the research company Santiment, already on January 24, large investors switched from selling to buying, following the “buy the dip” rule. A rhetorical question appeared on Santiment’s Twitter:
– Are traders switching from #FUD-mode to #FOMO-mode in just a single day?
FUD means Rear, Uncertainty, and Doubt, and FOMO is Fear of missing out. Experts suggest that the FOMO effect could push bitcoin up by 15%, but no more, because the price of $40K is a strong resistance level, and the next resistance level is $43K. Most analysts do not expect fast growth of BTC in the short term with an update of the all-time high.
However, market veteran Peter Brandt has a different opinion. He believes that after the recent drop, growth may still become parabolic. The fact is that sales volumes were not as critical as before when the market fell. Therefore, recovery can be more active. Expert says:
– We haven’t seen the kind of volume expansion that we’ve seen in previous short-term bottoms in bitcoin.