Technical Analysis of BTC/USD for May 1, 2021
Crypto Industry News:
After several years of painstaking work, the long-awaited Taproot update is ready to go. The community will now decide whether or not to agree to its implementation.
Taproot is a soft fork of the Bitcoin network that integrates Schnorr signatures, an alternative signature method to ECDSA – a method currently implemented on the network. This update, very simply, allows you to create some kind of master key to summarize the signature set into one. In this way, multi-signature multi-entry (UTXI) transactions on Bitcoin become more efficient, cheaper and easier.
This implementation opens the door to various methods of identity obfuscation by hiding the number of participants involved in a Bitcoin transaction.
Another advantage of Taproot is that it reduces the network load by reducing the transaction space by at least 20% (much more if the transactions are multisignature), which will increase the transaction processing efficiency per second and significantly reduce the fees for each transaction.
It is expected that the implementation of Taproot will enable possible development towards smart contracts, which would lead to even greater use of the network.
Technical Market Outlook:
The BTC/USD pair has been trading under the level of $60k for some time now and the recent high was made at the level of $58,884. Since then, the market pulled-back towards the level of $55,501, which is the technical support for the bulls, but a new local low was made at the level of $54,719. Despite the new low, the pull-back is still not bigger than the last one (olive rectangles area on chart), so the bulls still have the chance to bounce higher and suspend the momentum. The key short-term technical support is $52,620 and $51,239.
Weekly Pivot Points:
WR3 – $73,274
WR2 – $65,664
WR1 – $62,211
Weekly Pivot – $54,445
WS1 – $50,865
WS2 – $43,394
WS3 – $39,732
Event despite the recent correction from $64,789 to $47,060 the bulls are still in control of the Bitcoin market, so the up trend continues and the next long term target for Bitcoin is seen at the level of $70,000. Any correction or local pull-back should be used to open the buy orders. This scenario is valid as long as the level of $50,000 is clearly broken on the daily time frame chart (daily candle close below $50k).
The material has been provided by InstaForex Company – www.instaforex.com