After a very troubling week in all financial markets, bears also seem to have won on the Bitcoin (BTC) market. A sharp drop towards $ 3,800 crashes the price more than 50% in one day. And that movement makes one of the biggest and fastest crashes ever on the Bitcoin price. So before considering other investments in the Stocktrades list of dividend stocks, you may want to look at your investments on Bitcoins first and consider your options.
Strong support levels are easily broken and technical analyzes are therefore more difficult. The worldwide fear of the Coronavirus has a grip on all markets. Time to take a new look at the charts.
BITCOIN WORST CASE & BEST CASE SCENARIOS
Bitcoin analysis: filtering noise
The end of a very restless week is approaching, with the price currently hanging around $ 5,000. Again exactly on strong weekly support, to which we may attach little value.
Where we could normally expect a turnaround, we can now say carefully that it is quite possible that we will continue to go down.
One way to filter out as much noise as possible is to zoom out a lot further than usual. Hence I look at the higher timeframes. In order to get a longer-term picture, than all the noise that is currently seen on lower timeframes. Then it is somewhat possible to make a better analysis.
Bitcoin (BTC) weekly chart
To begin, we look at the weekly chart to see how the price is trying to hold out above the $ 5,000 zone. An important point for the coming days to keep.
Because this has often served as support and resistance in the past. However, the level may be a final straw from the bulls, who anxiously thumbs at good news regarding the Coronavirus and all other markets.
A piece of bullish news can ensure that the support is strong enough and that a reversal will actually take place. Which can last for a short time, but with some new power from bulls can push the course considerably.
A gloomy week ahead despite reversal?
However, it must be taken into account that it will also look gloomy in the coming week. With new drastic measures, which ensure that not only regular markets continue to crash, but Bitcoin will also respond to this. A new test to $ 3,600 is therefore not out of the question.
Support at $ 4,800, $ 4,200 and $ 3,600
On the daily chart of Bitcoin, we see that with a possible further decline, support is still at USD 4800 and USD 4200 before USD 3600 will become a reality.
Although a major flash crash to $ 2500 would not be out of the question. Should the price make the previous movements and again make a crash of 50%.
In a bullish scenario, an ascent to $ 5800 will already be very important and breaking it can give the market some peace of mind again. In addition, rapid recovery can be taken into account.
From the past, we see that solid panic on the market can also recover very quickly and bring prices to old levels within a few days. For now, it is especially very careful and then hope for a piece of good news before trading on your next cryptocurrency.