Holder Bitcoin may have experienced a ups and downs week when BTC / USD witnessed the biggest sell-off in history, causing the leading digital asset to drop $ 70 billion in market capitalization in 24 hours.
Anyone who thinks back on that period of time feels shudder and what they are currently facing at the moment are troubling questions: What will come in the coming days and the prospects for Bitcoin have changed?
Bad changes were predicted in January
In an analysis on Jan. 12, investor Keith Wareing stated that Bitcoin could drop to $ 3,800 in April 2020.
Monthly chart of the BTC/USD | Source: TradingView
The above conclusion is drawn from the fact that monthly volume has been continuously decreasing for several years and the MA of the bollinger bands on the monthly chart has been broken every month in the last quarter of 2019.
Similar models also appeared on the MACD indicator in July 2018, resulting in the price of BTC dropping from $ 8,500 to $ 4,000 in a few months.
In the sequence of these events, it is evident that there are not enough Bitcoin buy orders to reach new all-time highs.
Did anyone buy Bitcoin last Sunday?
BTC/USD 4 hours | Source: TradingView
On January 18, Bitcoin broke out of the 7-month downtrend channel formed since the FOMO Libra pump in June 2019. At this point, Bitcoin's prediction to hit the $ 4K threshold seems ridiculous.
In contrast, $ 4K was the right price to consider last Sunday, as BTC fell into a steep descending channel that is about to break the downtrend 7 months earlier again. In other words, if $ 7,500 fails to hold, there is no support threshold of up to $ 4,000
Peter Schiff, the famous rich man and Bitcoin hater, quickly seized the opportunity to coffee.
BTC USD 1 hour | Source: TradingView
Just 32 minutes after the trendline on the hourly time frame was broken (it was the trendline on the time frame 4 hours a few days ago), Schiff tweeted the following:
If any institutional money ever actually went into #Bitcoin Something about to come out, never to return. Bitcoin has finally proven conclusively that arranged neither a store of value, a safe haven, nor a non-correlated asset. The Bitcoin chain letter has finally run out of links!
– Peter Schiff (@PeterSchiff) March 11, 2020
"Even if institutional money goes into Bitcoin, it will soon leave and never return. Bitcoin has finally been convincingly proven it Not a store of value, a safe haven good The property is not correlated"
It is important to understand why Schiff watches Bitcoin so closely and why does he intend to prevent people from investing in it?
His Euro Pacific Bank has a target customer base of high net worth search overseas tax structures. For a long time, Bitcoin was considered by some to be an alternative place to store assets instead of exploiting suspicious tax holes, so it is clear that BTC is in Schiff's interest and it is directly strikes his business model.
Although the idea that institutional money will leave Bitcoin forever is not objective, Peter Schiff's comment is worth considering as organizations bought BTC on a 4-month discount when Bitcoin traded between 3,000 and 3,000. $ 4,000 know it is time to leave the market.
If so, then that would put an end to one of the current popular theories, that is, securities and Bitcoin are correlated.
Did margin buying orders spark Bitcoin sell-offs?
If it is true that institutional investors have just withdrawn from Bitcoin, the increase from $ 3,850 may indicate that we are not only bottoming out, but we are also about to be unrelated to the stock market.
BTC/USD and S&P 500 daily | Source: TradingView
The math is quite simple, the S&P market capitalization is about $ 25K billion compared to the Bitcoin pre-dump ceiling of $ 150 billion. Put simply, organizations lose more from S&P than Bitcoin after the crash.
So, in the case of calling for a margin buy order on the stock market as prices started to decline amid the global panic of the Corona virus, what was the fastest liquidity asset they could recognize?
The answer is most likely Bitcoin. And because all of them exit at the same time (because they all have the same reason to exit), the outcome is similar to the situation where ICOs unlock tokens, i.e., large holders 'knock down' prices causing smaller holders to fail. masterpiece.
There are several reasons to be optimistic after the Bitcoin price crash
BTC/USD daily | Source: TradingView
Despite all these disasters, there is still hope for us. The move's upside from $ 3,850 has kept the daily support line in place. Thus, the current support level is around $ 4,400 and will slide to around $ 4,000 on April 1.
- Holder really is not confused
However, the resistance to breakout this channel is around $ 7,400 and will drop to around $ 7,100 on April 1. So, if it is true that institutional money has actually left, the range will theoretically hold even without any further sell-offs on the stock market.
- New entrants can come in for a lower price
This will bring confidence back to Bitcoin and create opportunities for those who previously thought it was too late to step in and start buying as cheap as for.
- Future sell-offs are not extreme
The reason this is not only good but even great for Bitcoin is because Bitcoin because of the large number of small holders instead of large small holders, means that it is less likely to be catastrophically sold out in the future. This will also allow digital assets to build on new levels of support.
Don't expect this price to last for months
Level of difficult BTC mining | Source: BTC.com
Mining difficulty is still increasing while prices are falling and halving to only 57 days. That is, the process of bringing Bitcoin into the market is done at a much faster rate than the current price because they will have higher production costs.
This may not happen overnight, but when it does (at least another 6 months) it is likely to trigger one of the most impressive bull tremors we've ever seen. At the same time, the current price movement will not last longer or lower.
Discount script
This is still a very chaotic time for the entire cryptocurrency. If the support of $ 4,400 ($ 4,200 at the end of next week) cannot hold, the charts indicate $ 2,450 as the next support level.
Low prices will increase FOMO or lack more confidence. However, if everyone has overcome this week's pain, they will not sell if they reach the $ 2,450 threshold as this will be a clear bottom.
Price increase scenario
On the upside, there is still a gap of CME at $ 9,165, but now institutions are said to have exited the market so it is unlikely that we will see regular fills as before. Moreover, even traders will leave the leverage platforms and return to the spot trading platform. In other words, the “alt season” will come because people try to regain losses by speculating on altcoins again.
The resistance levels to break down are now $ 7,400 and then $ 8,000 before seeing $ 11,250 as the next target to bring Bitcoin on the same upward path on Jan. 15.
You can see the price of BTC here.
Disclaimer: This is not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
Minh Anh
According to Cointelegraph
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