It has been a rough two weeks for Bitcoin and cryptocurrencies across the board. But, price action aside, fundamentals are pointing towards recovery.
And indeed, BTC price is bouncing back. Trading above $6,200, bulls have a reason to be positive in the immediate term.
There isn’t much to talk about since price action is pretty much in bad shape and all technical indicators are as expected: Flashing Red.
Apart from the 200-day moving average that still holds. Prices are finding support at this structural distribution flexible line despite prices crumbling below the long-term support trend line of 2015-2017. This, according to Rob Sluymer, while talking to Bloomberg, has left a “potentially vulnerable longer-term profile.”
“The crypto breakdown over the past week mirrored the ‘get me out of everything’ panic that dominated all asset classes, whether they were defensive (bonds and gold) or not (equities). Lower highs and lower lows are in place for Bitcoin, leaving in a compromised, potentially vulnerable longer-term profile.”
To Vijay Ayyar of Luno, Bitcoin prices may bounce to $6,000 before ranging in the medium term:
“There was a lot of buying pressure sub-$5,000 as can be seen and clearly indicates seller exhaustion. These prices were potentially below running cost for many miners, and we’ve seen hash rates drop. Miners are also better off just buying Bitcoin at such prices so there could be that aspect as well.”
BTC/USD Price Analysis
It has been a relieving 24 hours for BTC bulls. Up 15% with increasing trading volumes, prices are inching higher.
But still, BTC/USD structure is bearish following March 12 candlestick that broke below long-term support. While bulls edge higher, risk-averse traders should wait until bear pressure is invalidated.
That means, once prices rally past 6,500$ with decent buy pressure as mentioned in previous BTC/USD analysis, traders can buy the dips with first target at 8,000$ or Mar 12, 2020 highs.
Chart courtesy of Trading View-Coinbase
Disclaimer: Views and opinions expressed are those of the author and is not investment advice. Trading of any form involves risk. Do your research.