Bottom line: Bitcoin bullish structure remains intact until prices stay above 3850 levels. Short term corrective drops remain possible, but bulls are poised to take out 8000/9000 resistance soon.
Fundamental Outlook:
The IMF predicts that both developed and emerging market economies shall face recession. It is believed that the ongoing COVID-19 pandemic is the worst since The 1929 Great Depression. Global equity markets may resume lower again as relief rallies are set to halt soon.
Oil prices declined by over 7.5% yesterday and closed below the 21.00 mark since March 31, 2020. The agreement between OPEC members to cut production by 10 million barrels per day over the next two months have failed to curb the drop. Possibilities of a price war is ruled out for now and this could be a positive for Oil.
Meanwhile U.S tops the list of the highest affected from COVID-19 crisis as numbers cross over 6 million. Around 325 new case were registered with 17 fresh casualties.
Technical Analysis:
Bitcoin bulls remain in control for now and are targeting towards 8000/9000 levels in the short term. The wave structure remains constructive for bulls as Bitcoin carved a higher low at 3850 levels earlier. The December 2018 lows at 3100 remain bottom line for the bullish structure to remain valid.
The rally between 3100 and 13800 was an impulse, which was followed by a corrective drop towards 3850 levels. Since then, bulls have managed to carve higher highs and higher lows with immediate support seen around 5686.
Also note that the corrective drop between 13800 and 3850 had bounced from fibonacci 0.88% retracement of the previous rally. A push below 3850 would threaten to break below 3100 levels, going forward.
Most traders might be willing to hold long positions taken earlier and also initiate fresh long around 6800/6900 levels, with protective stop at 3850 and projected targets towards 8000 and 10500 respectively.
Prepared by
Harsh Japee, Technical Analyst.
Bitcoin Chart
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