Bitcoin Weekly Forecast: Investors bet on Bitcoin aimd global turmoil
CRYPTOS | Apr 24, 15:55 GMT
- Bitcoin enjoyed a weekly of relative stability.
- Investors flock back to the cryptocurrency market.
- BTC/USD bulls will stumble on approach to $8,000.
Bitcoin dropped to $6,754 on Monday and spend the most part of the week consolidating under the critical resistance level $7,000. However, some buying interest re-emerged on Thursday, April 23, and helped to push the price towards $7.748, which is the highest level of the month. At the time of writing, BTC/USD is changing hands at $7,570, which is about 6% higher than seven days ago. Bitcoin’s market capitalization is registered at $138.4 billion, which is 63.9% of the total market of digital assets.
What’s going on in the market
Oil price collapse below zero has become the key talking point of the week. The unprecedented event was caused by vanishing demand and gross oversupply that resulted in the shortage of oil storage facilities and forced the oil futures holders to sell the expiring contracts at a negative price to avoid the physical delivery.
Bitcoin dropped initially amid the major sell-off on the global markets. However, the downside momentum was short-lived and the coin stayed in a tight range until the end of the week. Cryptocurrency enthusiasts touted Bitcoin’s stability as another sign of decoupling from traditional markets.
As Marcus Swanepoel, the CEO of Luno, commented, that traders channeled their money to the cryptocurrencies to diversify their portfolios as they recognize the impact on equities will be greater and last longer than originally expected.
This view is supported by growing institutional and retail investors. Thus, the New York-based hedge-fund Renaissance with $75 billion in assets under management is one of the latest to get involved in the cryptocurrency investments. The hedge fund traded cash-settled BTC futures contracts on CME, according to its SEC filing. While the fund describes Bitcoin as a “new and highly speculative asset”, the progress in cryptocurrency adoption by major financial industry players.
According to the market analyst from Oanda Corp., Ed Moya, retail investors are also returning to the cryptocurrency market to protect their assets from inflation and other consequences of money-printing policies of the global central banks. Notably, many Americal investors used their stimulus paychecks to buy some digital assets. According to Coinbase CEO Brian Armstrong the cryptocurrency exchange has seen a surge of transactions of exactly $1,200.
BTC/USD: Technical picture
From the technical point of view, Bitcoin regained ground above $7,500, but it is still vulnerable to losses if it fails to stay above this level by the weekly close. Lost upside momentum may result in another period of range-bound trading with the lower boundary created by psychological $7,000 that has been limiting the recovery for the most part of the week.
A sustainable move below weekly SMA100 on approach to psychological $7,000 will bring daily SMA50 at $6,700 into focus. This area served as a backstop since April 17 and it has the potential to serve as a jumping-off ground for the next bullish wave. If it is broken, the sell-off may be extended towards the next barrier $6,500 reinforced by 38.2% Fibo retracement for the downside move from February 2020 high. This area the decline during the previous week.
On the upside, the next resistance area is created by $8,000-$8,200. This resistance area reinforced by a combination of 61.7% Fibo retracement for the downside move from February 2020 high and 23.6% Fibo retracement for the downside move from July 2019 high to December 2019 low, maybe a hard nut to crack for BTC bulls. Apart from that a thick layer of protective orders clustered around this level can absorb the upside momentum and push the price back inside the range.
According to Intotheblock data, a cluster of 1.8 million BTC addresses have their breakeven price in the range from $7,700 to $8,300, which makes this area hard for the bulls. However, once it is cleared, the recovery may be extended towards weekly SMA50 at $8.700. The last time BTC traded above this MA before the epic March sell-off.
Considering the upward-looking RSI on a weekly chart, BTC/USD is positioned for a recovery in the long-run. However, the movement won’t be linear, with several setbacks and retreats.
The Forecast Poll showed a mixed picture as the short-term expectations stayed bullish, while monthly and quarterly forecasts are less optimistic. While it means that the market is in no hurry to price in strong upside momentum ahead of the halving, the price expectations on a quarterly time frame moved above $8,000, while the monthly and weekly price predictions settled above $7,000 and above the current price.
Source from https://www.fxstreet.com/cryptocurrencies/news/bitcoin-weekly-forecast-investors-bet-on-bitcoin-aimd-global-turmoil-202004241555