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Between Wednesday and Thursday this week, the price of Bitcoin (BTC) went from $ 7,700 to $ 9,500 – an increase of more than 22%! The upside momentum then weakened, bringing BTC to around $ 8,900.
All of the major technical factors, such as spot market data, futures volumes, and demand from institutions, suggest that the rise from around $ 3,600 to over $ 8,000 was entirely organic: it was driven by investor demand. , maybe even whales, in view of Bitcoin’s halving.
However, it is unclear whether the rapid rise from $ 8,000 to $ 9,500 was truly organic or caused by identity theft in the futures markets. Biased reporting in fact, during Bitcoin’s growth above $ 8,000, there was a sudden surge in volumes in the futures markets:
“Futures volumes have increased significantly in the past two days as levels rapidly increased to $ 8,000 and $ 9,000, a move that mirrored that of March 12. Nearly $ 40 billion was traded yesterday.”
Bitcoin futures volumes, note the increase on March 12, April 29 and April 30. source: obliquity
The data indicates that, less than two weeks after Bitcoin’s third half, the structure of the cryptocurrency market has changed: it was previously driven by futures exchanges, while now by spot trading platforms. This healthy transition from very high leverage trading to more organic spot trading could be a solid starting point for the next Bitcoin rally.
Bitcoin’s halving will take less than ten days and could have a significant impact on the cryptocurrency mining industry. In fact, it will reduce the amount of BTC obtained after verification of transaction blocks, thus also decreasing the number of new coins regularly introduced in the market.
Many believe that as the supply is halved, the price of Bitcoin will increase significantly. However, this theory is not supported by historical data: after the previous two halving events, which occurred in 2012 and 2016, the price reacted to the reduction in supply only after 10 or 11 months.
In the short term, Bitcoin will face resistance at $ 9,200, $ 10,400, and $ 11,400. There is also key support in the $ 7,400 to $ 7,600 range: if it breaks, BTC could drop to $ 5,000.
Professional traders explain Bitcoin’s current trend
Discussing with Cointelegraph editorial staff, trader Eric Thies noted that Bitcoin’s technical factors look very promising:
“In the previous two halves, BTC proved to be strong by raising its price to a distance of 40% from then-record highs.
During each of these previous events, BTC continued to advance for more than a year, then a year and a half, reaching a new all-time high on both occasions. Right now, BTC appears to be following the same path as the previous two halves. “
Therefore, Bitcoin’s medium-term trend looks excellent, but Thies stresses that a pullback to support levels is inevitable in the short term:
“That said, the recent 25% growth will be followed by setbacks and new evidence of old resistance in an attempt to consolidate bullish development.”
In his opinion, in order for the Bitcoin trend to remain bullish even after half, it will be necessary to defend the support at $ 7,100 and avoid a contraction of up to the $ 6,000 area. If the support at $ 7,100 were to hold, according to Thies BTC it could hit $ 10,600 in May:
“Assuming support continues after initial retests of recent hikes, and current bullish momentum continues, we could see $ 10,600 in late May.
In this case, in the following months the price will continue to increase until it tests the historical maximum [20.000$]”
The bullish scenario
Bitcoin’s bullish scenario in the short and medium term, Thies explains, is very simple. In general, technical indicators, such as Moving Average Convergence / Divergence (MACD) in the longest time windows, including weekly, indicate the start of a new upward movement.
Cryptocurrency trader RookieXBT has about it commented:
“I don’t like to use indicators, but someone pointed this out to me. The MACD on the weekly chart is once again optimistic. Interesting times ahead just before half.”
Bitcoin’s weekly chart shows the start of a new MACD trend. source: RookieXBT
Bitcoin’s Relative Strength Index (RSI) fluctuates between 80 and 90 percent. When this value is greater than 75%, it indicates that an asset has been overbought. But since the RSI can remain oversold for long periods of time during a recovery, if Bitcoin manages to avoid a major pullback to the $ 4,000 to $ 5,000 range, the chances of the uptrend continuing will remain high.
Thies said:
“While the resistances [a 9.200$, 10.400$ e 11.400$] They will not be easy to overcome, from a macro point of view, this situation is really remarkable and becomes more and more with each new resistance conquered by Bitcoin.
Consolidation will take place, things will have to slow down so that the market can maintain control. Therefore, the bulls will have to defend the $ 7,100 level, this is where the most prominent support is found as indicated in various time frames. “
Instead, the opinion of many traders is bearish
After Bitcoin’s inability to break through the $ 9,500 wall and its subsequent return to the $ 8,000 area, according to many traders, it would have been a local spike rather than a real bullish trend that will push the cryptocurrency to $ 10,000.
according Michaël van de Poppe, a well-known cryptocurrency trader, a return to $ 5,000 or $ 4,000 is highly unlikely. However, a contraction of up to $ 6,000 would be completely reasonable:
“We probably won’t see a return to $ 5,000 or $ 4,000, especially after halving. However, a healthy pullback seems reasonable, which is likely to happen after halving.”
A potential target is a new 200 WMA test, between $ 6,500 and $ 7,000. “
Even Mohit Sorout, founding partner of Bitazu Capital, he defined the $ 9,500 level “a place where logically BTC has taken a break“, which suggests that the growth of the cryptocurrency may lose intensity in the short term.
Strong resistance on the daily Bitcoin chart. source: Mohit Sorout
Another operator, known by the name of Big Chonis Trading, noted that the increase in late April led to the formation of a “TD9” on Bitcoin’s daily chart. TD9 is a sell signal in the sequential TD system, which is triggered when the price of an asset increases excessively. In your opinion we will see a correction soon:
“Bitcoin’s halving is in 11 days. Enough time for another FOMO-powered bomb? It’s hard to ignore how yesterday’s candle closed and how it opened today with a TD9.”
the analyst Zoran Kole He said the area between $ 7,700 and $ 8,000 is the most logical support for Bitcoin. He also noted that throughout the trip up to $ 9,500, the bears suffered due to an over extension of the price increase and the bulls displayed incredible euphoria, increasing the chances that it would be a peak. local:
“Personally, I think it was a local peak. […] Swept bearish, euphoric bullish. For this trend to continue, you need to keep the support at $ 8,400. Otherwise, the area between $ 7,700 and $ 8,000 is the next most interesting area to open long positions. “
Bitcoin rejects a major trend line. source: Nunya Bizniz
Therefore, Bitcoin’s short-term negative projections appear to be in line with the bearish scenario identified by Thies, according to which a collapse below $ 7,000 would increase the chances of a continuation of the bearish trend:
“If necessary, there are also supports at $ 6,800 and $ 6,400. But a move towards these levels would indicate a continuation of the downtrend, which last year brought the price to $ 3,800 after the peak of around $ 15,000 in July. 2019. “
Bitcoin rejects a major trend line dating back to March 12, the presence of a TD9 sales signal, the fact that growth stopped at the level of the February collapse: the combination of these factors makes a correction after halving.
But at the same time, the significant increase in demand, demonstrated by growth in spot volumes and institutional interest, could represent a good basis for a solid and lasting recovery. For this reason, although the price of the cryptocurrency has already increased by more than 150% from the $ 3,600 low to date, the possibility that Bitcoin’s upward trend may continue cannot be ruled out.
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