On Friday, the price of Bitcoin shot up to a little over $3.7k, backed by healthy trading volumes. Since then, it has dropped back down to around $3.6k. But it is safe to assume that most of the sudden – and quite unexpected – gains have stuck. Where to now? Has the much-awaited bottom been finally left behind? Is this worst-ever BTC bear market on its way out?
The fact that the bulls have stuck around after Friday’s BTC price-spike and the convincing nature of the spike itself, have led many to believe that a potentially more consistent bearish-to-bullish trend reversal has just happened.
Certainly, technical analysis points to that same conclusion, so most of the current predictions are bullish ones. In regards to TA, the case made by the bulls is a solid one indeed.
All it really takes is a quick glimpse at the daily chart to see that the price has simply obliterated a 5-week old falling wedge pattern. The spike was the biggest one since December 28, and – as mentioned – it came against the backdrop of increased trading volumes.
On Friday, the trading volume hit the $7.73 billion mark, logging a 54.6% increase – the biggest one in three months.
Despite the optimism and the momentum, the price failed to break through the resistance level defined by the 50-day MA, bouncing from it repeatedly.
The 5- and 10-day MAs on the other hand have been left behind, and they both turned upward, producing a bullish crossover.
Adding the RSI to the equation, it is now clear that the 50-day MA resistance, located at $3,642 will most probably fall as well. After that, the next target for the bulls is the $3.8k mark, followed by $4k down the line.
Those looking for further TA proof regarding the current bullish momentum will like what the 6-hour chart shows in relation to the 50-candle MA. The level which had denied several breakout attempts over the last 3 weeks, was left in the dust on Friday.
What about the downside? To deny the bulls yet again, the price needs to fall all the way to the $3,322 level, a support defined by the low of January 29. While such a turn of events does not appear likely on account of the obvious bearish exhaustion which preceded the recent high-volume breakout, it still cannot be completely disregarded.
What do the fundamentals say?
Suddenly, with the crypto bulls back in the mix, the news-flow has turned positive too.
Wherever one looks, talking heads express optimism regarding the future of BTC and crypto in general.
According to finance manager Ric Edelman, a BTC ETF approval is “virtual certainty”, being more of a question of “when” than one of “if”. In Edelman’s view, it is only a matter of time till one of the currently weighed ETF initiatives satisfies the caprices of the SEC.
Apparently, there’s quite a bit of demand for such an ETF on the part of financial advisors, who are well aware that their clients are looking to throw money at such an opportunity.
In other news: the chairman of the Financial Stability Board (FSB) Randal K Quarles, sees a major challenge in the crypto industry, aimed at the G20’s financial stability. In his inaugural speech, Quarles held crypto assets capable of challenging “any framework”.
In still other news: Binance are forging ahead with their plan to release their decentralized exchange, aiming to forever change the way cryptocurrencies are bought and sold around the globe.
Binance DEX will soon be released for public testing and if all goes according to plan, it may indeed quickly blossom into a fundamental game-changer.
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