Connect with us


Why Bitcoin Could Rally to $24,000 Before Seeing Its First Major Retrace



  • Bitcoin has been flashing some signs of strength today as its buyers attempt to flip $16,000 into a support level
  • Although it has yet to reject at this level, it has also been unable to secure a firm foothold above it
  • One on-chain analyst is now noting that he expects Bitcoin’s ongoing rally to extend significantly further before buyers are met with any significant resistance
  • He is specifically watching for a move to $24,000, noting that this could be where bulls finally lose their footing and BTC sees a sharp retrace

Bitcoin is currently in the process of breaking above its $16,000 resistance level, which is proving to be somewhat difficult as buyers and sellers continue battling for control of this key level.

If broken above, BTC could be positioned to see significantly further gains in the days and weeks ahead.

One trader is now noting that many on-chain indicators are all suggesting that Bitcoin is poised to rally in the days and weeks ahead.

However, he believes that the cryptocurrency’s 350-day EMA – which sits around $24,000 – will prove to be serious resistance and potentially spark a sharp selloff.

Bitcoin Rallies Higher as Bulls Target $16,000 

At the time of writing, Bitcoin is trading up just over 1% at its current price of $15,950. Throughout the morning, bulls have been trying to surmount $16,000, but the selling pressure here has proven to be quite significant.

If rejected here, BTC could face a strong downtrend that causes it to cut deep into its recent gains.

A break above this level, however, would be incredibly positive and potentially help launch it towards fresh all-time highs.

On-Chain Analyst Claims Upside is Imminent 

One on-chain analyst explained in a recent tweet that he is targeting Bitcoin’s 350-day EMA as a level at which BTC might tap before plunging lower.

“So many indicators are bullish right now for BTC that I expect price to rally in the coming days+weeks. But when price reaches the 350dma x 2 I (red line) expect a correction as we saw multiple times in 2016/17 using these levels as strong resistance.”

Image Courtesy of Philip Swift.

He further added in a later tweet that this level sits around $22-24k, making this his near-term upside target.

“Given current trajectory, I expect price to approach the 350dma x 2 around $22-24k. Maybe we need to correct there for a while due to FOMO kicking in having breached ATH?”

Featured image from Unsplash.
BTCUSD pricing data from TradingView.

Source link


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




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:

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:

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:

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.”