Bottom line: Bitcoin long term bullish structure remains unchanged until the crypto trades above 3850 mark. Bulls may attempt yet another push towards 10500 resistance before correcting lower again. A corrective drop would provide opportunity to initiate further long positions.
Fundamental Outlook:
Bitcoin halving on May 11, 2020 turned out to be a Non-Event with respect to price action. Bullish sentiment prevails in the crypto but a 10-15% drop cannot be ruled out yet. Bitcoin trades around 8900 levels as we write this article and could drop towards 7200/500 levels. This had happened during prior Bitcoin halving as well.
Dow Jones had closed lower by over -2.00% yesterday along with its peers SPX500 (-2.75%) and NASDAQ (-2.5%). The drop doesn’t come as a surprise as markets cannot ignore a looming recession in 2020. Also, as US and Europe re-open post lock down, fears of a possible re-surge in COVID-19 cases remain. It would be interesting to see how UK and European markets open today after the overnight turn in risk assets. Watch out for the UK GDP figures today around 02:00 AM EST, expected to print -7.2%, YoY.
AUDUSD ticked lower yesterday, following sentiment in the US Stock Markets. The growth linked currency pair is trading around 0.6477/79 as we write the article and could come under further pressure if risk aversion continues and markets decline further.
Technical Analysis:
Bitcoin remains in control of bulls over the long term, as it has managed to print series of higher highs and higher lows since 3850 mark earlier. The crypto is seen to be trading around 8870 levels for now after having touched 10072 highs last week. Bulls maybe inclined to push towards immediate resistance at 10500 levels, before pulling back.
Alternately, Bitcoin might have carves an intermediary high at 10072 levels and the corrective drop may be underway towards 7200/500 levels respectively. The fibonacci 0.618 retracement levels is seen towards 6200 levels and a bullish bounce remain high probability if prices manage to reach there.
Traders might have booked some profits around 10000 mark as they prepare for a corrective drop towards 7200/500 levels. Any corrective drop from here might be considered as an opportunity to initiate long positions.
Prepared by
Harsh Japee, Technical Analyst.
Bitcoin Chart
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