20.05.202117:21 Forex Analysis & Reviews: Bitcoin: "bloody Wednesday" is not a knockout for cryptocurrencies

At least that's what Mike Novogratz, CEO of Galaxy Digital, and a well-known cryptocurrency advocate, thinks so.

Novogratz considers yesterday's collapse, and the previous days of the market decline, "a supply reaction." More and more participants, companies, and projects appear on the market that seek to become a part of it. Yes, it generates demand.

In 2017, during the first wave of the bullish market and the dominance of ICOs, something similar was observed. After the collapse, only the strongest projects survived. Now, too, only those who prove their worth to society will be able to survive and prosper.

The "carnage" of May 19, according to Novogratz, is the time to make a move, not a knockout for the market. Of course, this situation will harm many, but now is not the time to sell.

Even though the main cryptocurrency fell below $30,000 yesterday, Novogratz does not abandon his previous forecast of a possible flat in the $40,000-$45,000 range before the market moves to the next stage.

But not everyone is so patient and optimistic. Scott Minerd of Guggenheim Investments thinks that it is now appropriate to recall the comparison of the cryptocurrency market with the tulip mania.

CryptoQuant CEO Ki-Young Ju refers to the signals of the Whale-Dump indicator and states that the market is already bearish and the worst is yet to come. "Crypto investor whales started depositing BTC on exchanges when the price was $50,000. I was super optimistic before Elon's tweets. What followed later looks like a butterfly effect. " he said.

Ki-Young Ju states that the whale drop indicator has reached an annual high since the market crash in March 2020: "If this is an organized move, Bitcoin will fall again. If not, we can at least retest the bottom."

The massive outflow of bitcoins from exchanges also became known: coins worth more than $750 million were withdrawn in the blink of an eye.

But such industry giants as Michael Saylor and Cathie Wood from Ark Invest, following Novogratz, are confident in the prospects of bitcoin in the future. Saylor notes that all organizations under his control still hold $111,000 worth of digital coins without selling anything.

Meanwhile, on the bitcoin daily chart, we see that yesterday's "carnage" left behind long shadows. As noted in yesterday's forecast, bitcoin went into the $29,000 mark, but the day closed above $34,708.27.

Today's daily candle so far confirms the level of 34,708.27 as a support. Resistance remains at 41,980.24. Now, this horizontal line should be the focus of attention.

If the price breaks the level of 41,980.24 and can gain a foothold above it, it will be possible to look for further recovery. But if it confirms it as resistance, it is technically possible to return to the levels of 34,708.27, or even 28,392.99.