- Bitcoin’s recovery may be limited in the short run.
- The long-term Bitcoin’s trend point upwards.
Bitcoin has reached an important barrier $7,500, however, the further upside may be limited due to a combination of technical and fundamental factors. Thus, a strong resistance created by a thick layer of selling orders may prevent BTC from sustainable recovery in the short run. Also, a high level of uncertainty surrounding the upcoming halving may deter players from active trades.
However, According to Marcus Swanepoel, CEO Luno, BTC and major altcoins may receive support due to snowballing quantitative easing initiatives as investors will look for ways to diversify their portfolios.
This week bitcoin has taken some important steps forward with the price now at US$7,490, but as soon as it passes US$7,500 the bears start selling. The question for investors is where does BTC go from here, and the answer may depend on how much liquidity from the many quantitative easing (QE) initiatives moves into cryptocurrencies. With the performance of equities, bonds and some commodities we see no reason why investors wouldn’t start diversifying their investments and start to show much stronger support for Bitcoin and the other main cryptocurrencies.
BTC/USD: Technical picture
A strong move above $7,000 took BTC/USD above weekly SMA100 and 50% Fibo retracement for the downside move from February 2020 high, which is a positive development from the long-term point of view. The first digital coin has created six green candles in a row on a weekly chart and regained 100% of its value from the lowest level of the year hit on March 12.
While the long-term picture looks inspiring, BTC may enter a consolidation phase in a range limited by $7,000 on the downside and $8,000 on the upside. the upper boundary of the range is reinforced by 61.7% Fibo retracement for the downside move from February 2020 high and closely followed by 23.6% Fibo retracements for the downside move from July 2019 high to December 2019 low.
BTC/USD weekly chart
On the downside, the sell-off below $7,000 will bring $6,700 into focus. This support is created by daily SMA50 that has served as a backstop since April 17. If it is broken, the bearish momentum will gain traction and push the price towards the next barrier $6,500 created by 38.2% Fibo retracement for the downside move from February 2020 high. This area limited the decline during the previous week.