The Bitcoin price, on May 19, plunged by over 20 percent, at some point crashing below $30k, sending the flagship cryptocurrency to a three-month low.
Crypto commentators, despite the pullback on May 20, suggest that the crypto winter is not over.
In their view, Bitcoin’s weakness coincided with a dump down in high-growth stocks and a contraction in tech-heavy indices, including NASDAQ.
At the same time, the rotation back to traditional stocks and other stable assets has seen Bitcoin’s physical competitor, gold, gain.
These differences between two assets, serving the same purpose but appealing to different investors, point to a possible shift in investment style.
Still, crypto proponents believe May 19 losses were climactic. Yesterday’s resilience could usher in another wave of demand that may thrust Bitcoin and crypto prices to new highs.
Part of this is because of Bitcoin’s resilience, as history shows, and the technology behind the coin.
Interest from institutions and Tesla not Selling is Bullish
Despite energy concerns, Bitcoin has found traction at the depth of the pandemic, helping thousands move funds across jurisdictions cheaply and near instantaneously.
Then, Tesla and Elon Musk, even after halting BTC as a payment method, said they had “diamond hands,” choosing not to liquidate their BTC holdings.
Also, this is not forgetting the influx of opportunistic institutions doubling down on the currency, hoping to increase yields.
Even though there are suggestions of a change in investment tact, their confidence in crypto won’t go unnoticed, identifying the currency as worthwhile and valuable in portfolio diversification.
Bitcoin Price Analysis
The BTC/USD price is stable but down a massive 18 percent in the last trading week.
Behind sharp declines that saw Bitcoin prices crash below two support levels at $45k and $42k was an uptick in trading volumes.
Presently, the BTC/USD price action favor sellers. Even with market-wide optimism, prices are trending inside May 19 trade range with lighter trading volumes.
Accordingly, every pullback is an unloading opportunity with targets at $29k—Feb 2021 lows from volumes analysis.
On the flip side, expansion reversing losses of May 19 and thrusting prices above $45k may revive interest, pumping BTC prices back to over $50k.
Chart Courtesy of Trading View
Disclosure: Opinions Expressed Are Not Investment Advice. Do Your Research.
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