Bitcoin (BTC) jumps 6% after Fidelity announces crypto exposure to 401k plan holders – dead cat bounce?

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YEREVAN (CoinChapter.com) – Bitcoin (BTC) jumped 6% in the previous 24 hours and got back above the significant support at $40,000. The BTC/USD exchange rate stood just above $40,500 in Tuesday’s Asian-Pacific session. However, the charts hinted at a looming correction rather than a recovery.

The weekly BTC chart spells dead cat bounce.

The price action got back above crucial support, best visible on the weekly chart. But the trading volumes did not reflect Bitcoin bulls’ determination to initiate a rally. Lowering trading volumes typically indicate insufficient weight behind the bias and signify an upcoming reversal.

Also read: Silk Road founder Ross Ulbricht forfeits $3,000,000,000 in BTC to the US government.

Additionally, the relative strength index (RSI; the purple graph on the chart above) diverged from the price action bias. In detail, while the price registered higher highs, the RSI graph lost momentum and printed lower highs. The said deviation also indicates a looming decline and supports the bearish forecast. Thus, the current upside move appears to be a possible dead cat bounce.

Meanwhile, broader crypto adoption fuelled Bitcoin’s uptrend.

Fidelity to offer Bitcoin as a part of 402(k)

Fidelity Investments, the nation’s largest provider of employer-sponsored pension accounts (401k plans), announced further crypto exposure on Tuesday. The financial giant said it would enable its beneficiaries to put a part of their retirement money into Bitcoin — if their employers are willing to allow it.

Also read: The Central African Republic adopts Bitcoin as legal tender while BTC price drops below $40K.

Notable, Bitcoin offers would put millions of people in the direct vicinity of Bitcoin investment without having to set up an account on a cryptocurrency exchange. However, the decision did not go well with the Department of Labor, a governmental structure overseeing retirement plans. As a result, department officials made it clear that they did not support plans that added digital assets to their investment offers.

Meanwhile, Fidelity’s crypto offers took off a year ago after launching its Fidelity Advantage Bitcoin ETF™ and Mutual fund. Additionally, the investment giant held $2.4 trillion in 401(k) assets in 2020, or more than a third of the market, according to the research firm Cerulli Associates.

Also read: Is Michael Saylor selling Bitcoin? Not so fast.

Dave Gray, head of workplace retirement offerings and platforms at Fidelity, commented on the growing interest from plan sponsors.

We started to hear a growing interest from plan sponsors, organically, as to how could Bitcoin or how could digital assets be offered in a retirement plan.

said Gray.

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