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Bitcoin At $20K by New Year? These Two “Important” Indicators Say So

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A short-term slipover in recent sessions has not refrained Bitcoin from eyeing $20,000 by the end of this year.

Independent financial analysis firm TradingShot wrote in its recent analysis that it sees the cryptocurrency recovering its all-time high in 2020. The agency cited two technical setups that have dictated the Bitcoin price behavior in the last 1.5 years, adding that their validation for the rest of this year could push the cryptocurrency towards $20,000.

Bitcoin Confluence

The first of these technical indicators is a Hyperbola – a long arc that has acted as Bitcoin’s resistance since June 2019. This year, the cryptocurrency repeatedly tried to break above the curvy structure, with the latest attempt going as back as November 5, 2020.

Meanwhile, the Hyperbola resistance received additional strength from Pitchfork, the second technical indicator containing a string of Fibonacci levels acting as supports and resistances during Bitcoin’s uptrend. The chart below shows the two setups operating in unison.

Bitcoin long-term setup, as presented by TradingShot. Source: BTCUSD on TradingView.com

The chart structure above illustrates a sequence of identical fractals inside the Pitchfork setup. The technical indicator projects diagonal Fibonacci levels, made from the swing high of $13,880 to the swing low of $3,850. These levels have dictated Bitcoin’s medium-term supports and resistances while keeping the cryptocurrency en route to testing the Hyperbola resistance.

TradingShot offered a trading setup:

“Every contact with that Hyperbola (even the marginal miss) ended up with a pull-back that ranges from the 0.236 Fib to as low as 0.618 Fib (not counting the March 07 – 12 COVID meltdown which is non-technical). The trend-line we need to keep an eye on is the 40° angle from each bottom.”

‘When this breaks, the price pulls back. This can take place above the Hyperbola and the 0.236 Pitchfork Fib, so be ready to apply it,’ he added.

Topping at $20K

The parabola-pitchfork combo anticipates that Bitcoin could go a short-term correction from levels above $15,000 to as low as $12,100 (the 0.618 Fib level). But from there, the cryptocurrency could again pursue an uptrend while maintaining its price floor above the “40° trendline.”

The bullish momentum – again – expects to get exhausted near the parabola. Only this time, the curve is sitting near the $20,000-level.

TradingShot raised his bullish outlook of Bitcoin, also based on the reading of its Relative Strength Indicator. The price-momentum indicator makes higher highs whenever Bitcoin touches the 0.236 Fib level.

“[We] get the impression that if the 0.236 Fib breaks, the RSI has enough strength to allow a move to the ATH ($20,000) before the start of 2021.”

Bitcoin was trading near $15,500 at the time of this writing.



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Bitcoin may lose $30K price level if stocks tank, analysts warn

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The ghost of stock market crash is back again to haunt Bitcoin (BTC).

It happened last in March 2020. Back then, the prospect of the fast-spreading coronavirus pandemic led to lockdowns across developed and emerging economies. In turn, global stocks crashed in tandem, and Bitcoin lost half of its value in just two days.

Meanwhile, the U.S .dollar index, or DXY, which represents the greenback’s strength against a basket of top foreign currencies, has now climbed by 8.78% to 102.992, its highest level since January 2017.

The huge inverse correlation showed that investors dumped their stocks and Bitcoin holdings and sought safety in what they thought was a better haven: the greenback. 

More than a year later, Bitcoin and stock markets again wrestle with a similar bearish sentiment, this time led by a renewed demand for the U.S. dollar following the Federal Reserve’s hawkish tone.

Namely, the U.S. central bank announced Wednesday it will start hiking its benchmark interest rates by the end of 2023, a year earlier than planned.

Lower interest rates helped to pull Bitcoin and the U.S. stock market out of their bearish slumber. The benchmark cryptocurrency jumped from $3,858 in March 2020 to almost $65,000 in April 2021 as the Fed pushed lending rates to the 0%-0.25% range.

Meanwhile, the S&P 500 index rose more than 95% to 4,257.16 from its mid-March 2020 peak. Dow Jones and Nasdaq rallied similarly, as shown in the chart below.

Bitcoin, Nasdaq Composite, S&P 500, and Dow Jones rose in sync after March 2020 crash. Source: TradingView.com

And this is what happened after the Federal Reserve’s rate-hike announcement on Wednesday…

Bitcoin and the US stock market plunged after the Fed’s rate hike update. Source: TradingView.com

Meanwhile, the U.S. dollar index jumped to its two-month high, hinting at a renewed appetite for the greenback in global markets.

U.S. dollar index jumped up to 2.06% after rate hike announcement. Source: TradingView.com

Popular on-chain analyst Willy Woo said on Friday that a stock market crash coupled with a rising dollar could increase Bitcoin’s bearish outlook. 

“Some downside risk if stonks tank, a lot of rallying in the DXY (USD strength) which is typical of money moving to safety,” he explained. 

Michael Burry, the head of Scion Asset Management, also sounded the alarm on an imminent Bitcoin and stock market crash, adding that when crypto markets fall from trillions, or when meme stocks fall from billions, the Main Street losses will approach the size of countries.

“The problem with crypto, as in most things, is the leverage,” he tweeted. “If you don’t know how much leverage is in crypto, you don’t know anything about crypto.”

Burry deleted his tweets later.

Some bullish hopes

Away from the price action, Bitcoin’s adoption continues to grow, an upside catalyst that was missing during the March 2020 crash.

On Friday, CNBC reported that Goldman Sachs has started trading Bitcoin Futures with Galaxy Digital, a crypto merchant bank headed by former hedge fund tycoon Mike Novogratz. The financial news service claimed that Goldman’s call to hire Galaxy as its liquidity provider came in response to increasing pressure from its wealthy clients.

Related: Hawkish Fed comments push Bitcoin price and stocks lower again

Damien Vanderwilt, co-president of Galaxy Digital, added that the mainstream adoption would help Bitcoin lower its infamous price volatility, paving the way for institutional players to join the crypto bandwagon. Excerpts from his interview with CNBC:

“Once one bank is out there doing this, the other banks will have [fear of missing out] and they’ll get on-boarded because their clients have been asking for it.”

Earlier, other major financial and banking services, including Morgan Stanley, PayPal, and Bank of New York Mellon, also launched crypto-enabled services for their clients.

Is Bitcoin in a bear market? 

Referring to the question “are we in a bear market?” Woo said that Bitcoin adoption continues to look healthy despite the recent price drop. The analyst cited on-chain indicators to show an increasing user growth and capital injection in the Bitcoin market.

He also noted that the recent Bitcoin sell-off merely transported BTC from weak hands to strong hands. 

7-day moving average of coins moving between strong and weak hands. Source: Willy Woo

Woo reminded:

“My only concern for downside risk is if we get a major correction in equities which will pull BTC price downwards no matter what the on-chain fundamentals may suggest. Noticing USD strength on the DXY, which suggest some investors moving to safety in the USD.”