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Horus Hughes

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Bitcoin price has recovered from its weekend losses back above $9,000 as the U.S. government seeks another $3 trillion in an attempt to revive the economy.

On May 5, Bitcoin (BTC) price recovered a significant portion of its losses from Sunday’s weekly close correction and data from Cointelegraph Markets and CoinMarketCap shows that within the last hour the digital asset crossed above the $9K mark again.

Despite correcting to $8,500 on Sunday, Bitcoin price quickly rebounded and found support in the $8,700-$8,850 range before spending the majority of Monday consolidating in this zone.

Interestingly, Bitcoin’s quick recovery to its previous trading range occurs as modeling from the United States Center for Disease Control and Prevention expects that a rising rate of COVID-19 infections will lead to 134,000 deaths in the U.S. by June 1. This comes as many states execute plans that allow people to return to work in an effort to revive the economy.

Further bearish news for markets came at the market close today when The Treasury Department announced that it plans to borrow $3 trillion this quarter, bringing the total U.S debt closer to $25 trillion.

Currently, more than 30 million Americans have filed for unemployment, and a government-supported program designed to provide financial assistance to small businesses expended all allocated funds within the first few days of rolling out.

Given the recent correlation between traditional and crypto-markets, all of these factors should negatively impact crypto prices but at the moment this is clearly not the case with Bitcoin.

Bitcoin bulls target $9,500

In the 4-hour timeframe, traders will notice that Bitcoin had been in a day-long struggle to maintain above the 20-MA and the price was pinched between the $8,700-$8,550 where there are two high volume nodes on the volume profile visible range.

The hourly time frame shows that the price had already rejected three times at $8,950 and a move above $8,970 was crucial for gains above $9,000.

Within the last hour, BTC/USD broke above this resistance, allowing the price to rise to $9,100 in an attempt to knock out resistance at $9,130. Above $9,140 traders will target $9,440 and $9,600.

BTC USDT 1-hour chart. Source: TradingView

The 4-hr chart also shows that the MACD is on the verge of converging with the signal line, and over the past 8 hours, the RSI has shifted from 47 into bullish territory at 60.

On the hourly chart, traders will note that profit-taking is occurring as demonstrated by the long upper wicks of the last two candles, along with the rise in selling volume, sloping RSI and CMF.

BTC USDT 1-hour chart. Source: TradingView

As the current 1-hour candle is on the verge of closing, traders should keep an eye on volume to see if momentum wanes and the price drops below $9,000 or whether Bitcoin price can push above the resistance zone from $9,140-$9,200.

As stated in multiple analyses, the key area to break for a continuation of the uptrend is $9,500-$9,600.

Author: Horus Hughes

Source: Coin Telegraphl: Bitcoin Price Hits $9K as US Gov’t Asks for Another $3 Trillion

Bitcoin (BTC) bulls showed up early Monday morning and took full control of Bitcoin price by sending the price through the $6,900-$7,200 resistance zone to a nearly 4-week high of $7,454. The surge to $7,454 occurred as the United States’ markets opened strong, leading the S&P 500 and Dow to rally 7.03% and 7.73%, respectively.

It seems investors are beginning to gain some confidence as the rate of novel coronavirus infections begins to slow down in Italy, Spain and China along with murmurs of additional financial stimulus packages from governments.

BTC price bullish but the future is in flux

Bitcoin’s strong upside move pulled the price above the rising wedge trendline and through the $6,900 level which has functioned as a strong resistance since March 20. Earlier in the day, crypto trader Pentoshi pointed out that “BTC has now printed 3 consecutive $600 plus Mondays.”

As shown by the 4-hour chart, the price stopped just short of reaching a higher high above $7,460, a point which marked the beginning of Bitcoin’s catastrophic 52.84% drop to $3,775 on March 12.

BTC USDT 4-hour chart. Source: TradingView

Since topping out at $7,454, the price has corrected slightly, dropping to $7,227. After an 8.83% daily move and a 95.85% move over the past month, it is completely natural that a retest of lower levels occurs as some traders take profits and former resistance levels are then tested as support.

Therefore, a pullback to $7,200 and the rising wedge trendline at $7,150 seems likely. Even a pullback below the wedge trendline to $6,980 is on the cards. In the event that the aforementioned levels fail to hold as support, Bitcoin is likely to find buying interest at $6,900, $6,750 and $6,200. But such a strong retrace might damage the current narrative that the price has flipped bullish in anticipation of the halving event, that’s now just 36 days away.

A more desirable outcome for bullish investors would entail the price retesting $7,200-$7,150, followed by an upside move to $7,460 where the price would then consolidate, or on a high volume surge, continue up toward making a higher high at $8,000.

Daily timeframe

BTC USDT daily chart. Source: TradingView

On the daily timeframe, Bitcoin price has cleared the majority high volume VPVR node at $7,180-$7,429 but the price was halted right at the 50-day moving average. If the 50-DMA can be flipped to support then gains to the 200-DMA at $8,100 are likely but as suggested by Cointelegraph contributor filbfilb, overcoming $8,000 might not be as easy as a walk in the park.

On Monday, filbfilb said:

“$8,000 is the key level the bulls need to reclaim before the market could be considered as being back in a bull market.”

Filbfilb further explained that:

“Above the 100-WMA is a cluster of resistance, along with the 20-WMA which typically defines whether Bitcoin is in a bull or a bear market. In addition, both the 100 and 200-week moving averages are in this area and both have played an important role as resistance in the past. Amongst the moving averages is also the yearly pivot point at $8,100.”

As it stands, if the Bitcoin price was able to flip $8,000 to support and overcome the 200-day moving average, considerable resistance is likely to kick in from $8,500 and many analysts are calling for traders to go short from the $8,500 to $8,000 zone.

Less fear but no greed

Crypto Fear & Greed Index. Source: alternative.me

Currently, the Crypto Fear & Greed index shows a noticeable improvement in investor sentiment.

Since April 6, the sentiment index has risen from 12 to 20 — the highest value since the March crash — which is a clear indication that investors are beginning to feel positive about Bitcoin’s future prospects after the strong recovery from $3.775.

Nevertheless, a value of 20 still represents extreme fear. Given that Bitcoin price has risen 95.85% since March 13, there is always the possibility of a sharp multi-day pullback as traders take profit or are squeezed from leveraged positions.

Looking forward

The price now sits above the 50% Fibonacci retracement level and ($7,141) and turn the 50-MA ($7,487) to support would open the door for a shot at $8,000, which is also closely aligned with the 61.8% Fibonacci level.

Usually, the 61.8% level acts as resistance when the price trades below in a prolonged downtrend and when Bitcoin is in a sustained uptrend, the level functions as support.

Given the current positioning of the 100 and 200-day moving averages around $8,000, and the proximity of the 61.8% level, we can expect the $8K handle to be a point of contention.

Author: Horus Hughes

Source: Coin Telegraph: Bitcoin Has Gained $600 for 3 Consecutive Mondays — Price Hits $7,400

The VIX volatility index, the stock market’s main risk indicator, skyrocketed to 55 on March 9. This is the highest level since 2009. Meanwhile, Saudi Arabia’s talks with OPEC member Russia soured, triggering a price cut competition. This led Brent Crude, the international oil benchmark to trade at $36.20, down 20% from the previous session.

The Dow Jones Industrial Average tanked 6.9% — heading for it’s biggest daily loss ever recorded — while the UK’s FTSE is trading down 7.7%. Asian markets overnight performance also were not so much different as Japan’s Nikkei closed down 5.1% below Friday’s close.

Another ominous signal was the yield on the 10-year US Treasury note dropping below 0.5% for the first time in history, a strong indicator that investors are desperately looking for safe harbors.

Gold and Bitcoin react to global panic

Gold prices remained flat over the day at $1.673 per ounce after reaching a historic high at $1,700 last night. The commodity is up 5.6% in March, displaying a healthy performance during the Coronavirus epidemic which has now spread to nearly every country on the planet.

On the other hand, Bitcoin (BTC) is down 13% in 48 hours, testing its lowest level since early January at $7,750.

BTC USD 6-hour chart. Source: TradingView

Brian Armstrong, co-founder and CEO at Coinbase, was caught off guard by the recent price move as expressed by his shock by tweeting:

“Surprised we’re seeing the Bitcoin price fall in this environment, would have expected the opposite.”

BlockTower co-founder Ari David Paul, also tweeted that despite a recent 25% drop in less than 30 days, Bitcoin remains up 7.5% year to date.

Earlier in the day derivatives trader Tony Stewart tweeted that options skew indicator – an important he interprets as a good measure of fear – rose significantly over the past week. According to Stewart, “this skew measures a fear for further downside moves.”

Bitcoin 25d skew. Source: Skew.com

Analysts warn that the financial crisis could deepen

Dennis Dick, head of markets structure and proprietary trader at Bright Trading LLC, raised a red flag on the potential outcome of today’s market reaction. Dick said:

“There is potential that we could be at the start of a financial crisis part two… It’s a possibility right now that wasn’t on the table until we had this oil plunge over the weekend.”

Bitcoin daily price chart. Source: Coin360

As Bitcoin price corrects, altcoins have also taken on heavy losses. Ether (ETH) has dropped 8.86%, Bitcoin Cash (BCH) is down 7.72% and Litecoin (LTC) lost 10.42% to trade below $50.

The overall cryptocurrency market cap now stands at $222.2 billion and Bitcoin’s dominance rate is 64%.

Author: Horus Hughes

Source: Coin Telegraph: Bitcoin Tested as a Safe Haven After Biggest Stock Crash Since 2009

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