Bitcoin hasn't really done well in the past few days, since the highest $ 9,200 seen last Saturday, its price has dropped to as low as $ 3,800, marking a 50% drop. compared to the weekly highs.
Luckily, on the morning of March 13, the bulls were given an oxygen allowance in the state of dying, Bitcoin rebounded above $ 5,000 to a peak of $ 5,900. While this marks a more than 50% increase from the bottom, leading analysts think that Bitcoin is ready to recover even more in the coming days.
Renowned Trader Filb Filb, who succeeded in predicting price action in Q4 of 2019 and the subsequent recovery action in early 2020 when he published the chart below, recently gave three reasons at Why do you think Bitcoin will rise again soon?
Why can Bitcoin recover soon?
In the messages posted on Telegram channel Filb Filb gave three reasons why Bitcoin price will rise soon. Although he did not set a price target, he was still very optimistic about Bitcoin.
1. Bitcoin's short-term chart has formed a textual bottom pattern of Adam and Eve, which is a good indicator that a bottom is forming and a subsequent reversal will soon take place. .
2. The sponsorship rate on BitMEX, reaching extreme near local lows and peaks, has reached a high for shorts, meaning short hodlers have to pay for long hodlers. This shows that the market is inclined to short, a common thing when near the bottom.
3. Filb Filb wrote that the buyer of the order book has recovered strongly, suggesting that there is still demand in the cryptocurrency market.
MA 200 weeks
Renowned Trader Nunya Bizniz noted that, with the recovery after the collapse on Thursday brought Bitcoin prices above the 200-week MA – a level where Bitcoin has never closed below for more than a decade in existence. Bizniz said that the $ 3,800 level could become one of the best entry points.
The current dips below the log curve (blue) and the 200 week MA (red) were twice as deep as the next closest.
This may turn out to get one of the best entry points. pic.twitter.com/M4tHCIdboC
– Nunya Bizniz (@Pladizow) March 13, 2020
Indeed, while Bitcoin has plunged sharply from the 200-day MA, the 200-week MA is an indicator that Bitcoin is still in the long-term uptrend.
Furthermore, Moe analyst noticed that there was an extremely bullish candle printed on Bitcoin's three-day chart: the TD Sequential indicator printed a ripe candle, usually where the price reversed the trend.
The black swan phenomenon remains
Although the technical factors provide positive signals for Bitcoin, there are still some risks that can erase all recovery efforts.
Ross Middleton, the chief financial officer at cryptocurrency exchange DeversiFi, is pointing to weakness in traditional markets, which has forced institutional investors to leave their positions for Bitcoin:
"Traders are withdrawing money from Bitcoin to fund their margin calls on other types of assets. Perhaps they think there will be better short-term opportunities than Bitcoin appearing on other assets. "
This was echoed by Raoul Pal – a former Goldman Sachs director and CEO of Real Vision. He said that this decline could be related to “Bitcoin liquidation of hedge funds”, as regulators need to keep their portfolios at a certain level of risk.
It feels like any hedge fund that was long bitcoin is having to liquidate. VAR takes no prisoners. (For those new to VAR it is the measure of risk in a portfolio and is connected to volatility, so as vol goes up of all assets, they have to reduce risk). $ BTC #Bitcoin
– Raoul Pal (@RaoulGMI) March 9, 2020
What they say is that if the traditional markets continue to have worse movements, the price of BTC may drop even further. Because investors will try to hedge their portfolio risk to the lowest level, even if they completely abandon their position in the cryptocurrency market.
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.
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