Disclaimer: The writer is not a Financial Advisor, and this article is not investment advice. The information is written for educational and entertainment purposes only. The writer owns only a fraction of a Bitcoin for experimental purposes. BTC markets are highly volatile and risky in nature. DYOR before making any investment decision, rather than listening to a stranger over the Internet.
Bitcoin roared again and briefly hit $10,000, trumping all analysts who predicted doom and gloom, when it fell from $7,000 to around $4,000 in early March (that drop was brutal). Somebody on Twitter predicted that BTC will hit $600 soon (unfollowed him immediately). The analyses at Cryptoriate are not predictions, rather these relevant, concise, and to-the-point reports aim to establish a macro market outlook, identify critical supports and resistances, and highlight the need for a logical and patient approach.
Let’s dig into what is happening in the realm of Bitcoin:
In the last analysis on 16 Apr 2020, the importance of 144-MA on the Weekly time-frame was highlighted. A close above is always followed by a significant rise in the price, although it has happened only a handful of times in BTC history but remained 100% accurate so far. The chart I shared is here:
BTC closed above 144-MA on the week ending 26 Apr 2020. The price closed at $7,704 on Bitstamp. This was followed by a sharp increase in price and reached $10,055 on Bitstamp on 8 May 2020, an approximately 30% rise.
Well done 144, you have done it again!
Now let’s discuss some macro levels.
Monthly:
The monthly outlook is promising. BTC, after losing the critical 21 and 34-MAs at the end of Mar 2020, was quick to reclaim both in Apr 2020 close. The April close was a strong bullish candlestick, and May is its continuation so far. BTC price is hovering around $9,850 at the time of writing and briefly hit $10,000. However, there is a strong overhead resistance level at $10,850 and $13,850. A monthly close above $10,850 could pave the way to approach $13,850. A close above $13,850 (a low probability event at this stage) could be an extremely bullish sign and BTC could have some serious fireworks if it conquers it in a monthly close. On the downside, interim support has been formed at $8,550, followed by $7,500 (a combination of 21 and 34-MA), followed by strong support around $6,400.
Weekly:
The weekly chart looks strong too, but it has approached a critical overhead order-block spanning $10,150-10,350, while $10K BTC is also a major psychological number. If BTC manages a weekly close above $10,350, it can cruise towards $11,500. The following sellers’ lines are $13,750, $16,250, and $19,000. The clearance of one level paves the way to the next one. The most critical level is $11,500, which is also the previous high. A close above could be a good sign for the traders who are betting for a price surge.
BTC has also established a firm support order-block spanning $7,800-6,850, and the presence of 144-MA and 21-MA also strengthens the support. Hovering just below $10K, BTC is above all critical MAs such as 21, 55, 144, and 200 which is a sign of strength and buyers’ dominating the market.
Conclusion:
Bitcoin’s outlook is bullish at this stage, but it is approaching critical resistance levels at monthly and weekly charts. If BTC manages to surpass these levels, it could send the price towards the ATH of $20K. There is no price prediction here, only a step by step journey. On a side note, Paul Tudor Jones, a billionaire hedge fund manager and chief investment officer of Tudor Investment Corporation, said his fund may hold as much as a low single-digit percentage of its assets in bitcoin futures to help protect against a rise in inflation, according to the report published by Bloomberg.
How Bitcoin could be a hedge against inflation? The short answer is that the Bitcoin supply is limited to 21 million coins only and cannot be changed, while governments are printing money at unprecedented rates especially during the COVID-19 crisis.
The long answer is covered in my next article where a detailed report will explain how Bitcoin’s inherent characteristics make it one of the best investment vehicles and a hedge against inflation.
Stay tuned!
Disclaimer: The writer is not a Financial Advisor, and this article is not investment advice. The information is written for educational and entertainment purposes only. The writer owns only a fraction of a Bitcoin for experimental purposes. BTC markets are highly volatile and risky in nature. DYOR before making any investment decision, rather than listening to a stranger over the Internet.
