Calls for a $70,000 Bitcoin is picking momentum among technical market analysts as the cryptocurrency makes way into Tesla’s balance sheets.
Cheds, an independent cryptocurrency analyst who enjoys a massive following on Twitter, saw the BTC/USD exchange rate rising by at least 70 percent in the coming sessions. “Just an observation,” he said while citing a fractal-like Relative Strength Indicator for his bullish analogy, adding that whenever the indicator enters into a “power zone,” it sends the Bitcoin prices higher.
The “zone” represents the overbought areas in the chart above. An RSI reading above 70 shows Bitcoin in an exceeding valuation area that typically amounts to a sell-off. However, in the last two breakouts above 70, the cryptocurrency overstayed its welcome above 70, which led the spot price higher by 70-100 percent.
“Based on this theory, the [bitcoin] price should hit about 70k before cooling off, sometime in the next 3-4 weeks,” said Mr. Cheds.
The outlook appeared as Bitcoin established a new record high on Tuesday, hitting levels above $47,500 for the first time in its twelve-year lifetime. Traders flocked into the cryptocurrency market a day after American carmaker Tesla announced that it had purchased $1.5bn worth of Bitcoin as “alternative reserve assets” to their cash holdings.
In its filing with the Securities and Exchange Commission, Tesla said it plans to buy more Bitcoin in the future and—maybe—even enable its use as a medium of payment for its products and services.
The announcement has spurred analysts to make aggressive bullish calls on Bitcoin. Mike McGlone, the senior commodity strategist at Bloomberg Intelligence, said Monday that the cryptocurrency’s price would reach $50,000. Some think it could even cross a $100,000 should rich corporate houses take cues from Tesla and buy Bitcoin.
That appears to include Mitch Steves, an analyst at the Royal Bank of Canada, who anticipate Apple to become the next big buyer of the decentralized cryptocurrency—or even if it starts offering a crypto wallet or exchange service like PayPal did in October.
Bitcoin At $75K
Meanwhile, analysts at TradingShot, an independent market analysis firm, think Bitcoin will hit $75,000. They cite a so-called LMACD bullish cross for their upside analogy.
“Even the $75,500 target of a potential +98% surge would be quite realistic within a 2-month time-frame, as it would hit the 2.5“The only Fib extension of the Fibonacci Channel that hasn’t been hit on +0.5 intervals (see how 1.5 and 2.0 have been already hit).”
Bitcoin traders worry as BTC price remains pinned below $50K
Cointelegraph By Allen Scott
The price of Bitcoin (BTC) has failed to break above the psychological $50,000 resistance going into the weekend and has dropped below the $48,000 level on March 6.
Now traders are watching whether BTC/USD can break above the $50,000 level to resume the bull cycle. Conversely, a drop below the recent lows below $46,000 will likely open the door to new lower lows, which may then pose a threat to the bull run that has been in place for almost a year, at least in the short to medium term.
Pseudonymous trader Rekt Capital pointed out similar price levels to watch. If BTC fails to hold the current levels above $46,000, the trader expects Bitcoin to bottom somewhere in the area between $38,000 and $45,000 despite Bitcoin posting higher lows in recent days.
“BTC higher lows hold until they don’t,” he wrote. “Each subsequent reaction from the January HL was lesser and lesser. Could be the same now. Better to be safe than sorry by preparing for a potential breakdown from this HL.”
#BTC Higher Lows hold
Until they don’t
Each subsequent reaction from the January HL was lesser & lesser
Could be the same now
Better to be safe than sorry by preparing for a potential breakdown from this HL
— Rekt Capital (@rektcapital) March 6, 2021
One major factor that’s likely causing the current downward pressure on price is an uptick in whales’ activity. Data from CryptoQuant shows an increase in large transactions to exchanges on March 6, though miners’ activity remains relatively low.
As shown in the chart below, previous upticks in whales moving funds to exchange coincided with drops in Bitcoin price on March 3-4.
Macroeconomic headwinds for Bitcoin
As Cointelegraph reported, Bitcoin is also facing downward pressure from macroeconomic headwinds. A sharp spike in 10-year U.S. Treasury yields and a pullback in tech stocks, in particular, are weighing on cryptocurrency prices as investors flee risk-on assets.
Meanwhile, the Dollar currency index, or DXY, has broken through technical resistance, hitting the highest levels since November 2020.
Cointelegraph Markets analyst Michael van de Poppe points out that Bitcoin’s downtrend remains intact after the latest attempt to break $50,000 failed.
“This means that the trend is still down and overall weakness on the markets in the short term,” he explained. “$50,000 is so far a no-go for Bitcoin.”
However, Bitcoin, as well as gold, may see some respite soon as the DXY and Treasury yields are nearing their own technical resistance levels.
“I believe that the yields are getting topped out relatively soon including the DXY,” explained van de Poppe. “Both are in resistance areas, which means that we should be close to a top formation on these two, but also on a bottom formation for Bitcoin and gold relatively soon.”
March is often a bad month for markets and history repeats itself. So macro-wise, we’re still bullish on the cycle and heating up for continuation, despite the recent interest in yields.”
Traders speculate that Bitcoin’s price may continue to trade sideways for now
Cointelegraph By Benjamin Pirus
Bitcoin’s price has declined in recent days. While it has rebounded from its weekly lows, the asset’s trajectory remains uncertain says CryptoWendyO, a crypto trader on Twitter.
“The daily timeframe is not looking great as we are having trouble sustaining $50K,” she told Cointelegraph on Friday. “I am feeling like we will get a run to $51.6[K].”
“From there I would be cautious as rejection could lead back to the $50K -$45K range. A break down there could be a swift wick to $42-38K with a glorious recovery. Invalidation would be a sustained consolidation at $52K.”
After hitting record highs of approximately $58,360 in February, Bitcoin (BTC) dropped down to roughly $43,015 in subsequent days, based on TradingView data. The asset then rebounded up to about $52,660, before continuing its downward price action below $50,000. Bitcoin is trading at roughly $49,020 at time of publication.
Cheds, a trader on Twitter holding his CMT level I certification, expects “more consolidation from BTC above that key 42k level,” he told Cointelegraph on Friday. He also tweeted a chart of his range expectations.
“The big question is if the recent 27% correction is enough to bring us to a new high,” Cheds said. “In the meantime we will watch a tightening range on the daily of lower highs and higher lows.”
A number of technology stocks have also suffered price decline recently.
Buying Bitcoin Couldn’t Save MicroStrategy Shares From 50% Crash
Bitcoin price has had one of its largest corrections since the bull market began, and has since struggled to reclaim $50,000. But the scenario is nowhere near as bad for the cryptocurrency as it is for one of its biggest supporters.
Although the company’s share price had benefitted initially from buying BTC, it wasn’t enough to fend off profit-taking and an eventual now 58% correction in MicroStrategy. Here’s why this could be happening, and what it could also say about the current crypto market trend.
MicroStrategy Shares Fall 50% After Buying More And More BTC
One of the biggest catalysts kickstarting Bitcoin’s most recent bull run, was undeniably when MicroStrategy first revealed it had purchased a sum of BTC to add to its corporate treasure reserves. From then on, others have followed suit, and CEO Michael Saylor has doubled, and tripled down on his initial purchase.
The price per BTC has risen accordingly, from just above $10,000 to nearly $50,000 currently. Along with the price of Bitcoin, MicroStrategy shares have risen almost as sharply as investors used the company to gain exposure to the cryptocurrency, and also bet big on the reemerging brand as well.
RELATED READING | ONE YEAR LATER: BITCOIN EMERGES AS “THE STIMULUS ASSET”
But as Bitcoin started correcting amidst an uneasy macro environment, MicroStrategy stock shares have fallen by 58%. The chart appears to show a parabola that’s now broken, suggesting that the correction isn’t nearly finished.
MicroStrategy has nosedived by more than 50% since an early Feb peak | MSTR on TradingView.com
Could Bitcoin Fall Fate To The Saylor Effect?
As for why MicroStrategy is taking such a beating, it could be due to stock market jitters, that have most left the crypto market unscathed. However, it could be a sign of what’s to come instead.
The orange line superimposed behind the MicroStrategy chart above, is the BTCUSD price chart from Coinbase. Not every peak and trough has followed perfectly, but the path is close enough to suggest there could be some correlation between the two.
If there is a correlation, either Bitcoin is about to correct another 20 to 25%, or there’s something else afoot. As for what other reasons could exist for the divergence, it could come down to more ways to become exposed to BTC now existing in traditional markets than there was a year ago.
RELATED READING | HOW LASER EYES COULD HAVE BITCOIN INVESTORS SEEING RED
Another alternative is that CEO Michael Saylor’s BTC buying spree could be starting to be viewed as irrational, and former believers are now jumping ship. Saylor, who now adorns “laser eyes” on Twitter is one of the cryptocurrency’s biggest supporters, but doesn’t always place bets at the right time – even though the technology itself he bets on is a sure thing.
Saylor was once deemed the biggest loser of the dot com bubble, but ultimately the internet became widely adopted. Few argue that Bitcoin will eventually do the same, but could this scenario that hit Saylor in the past be playing out once again?
Featured image from Deposit Photos, Charts from TradingView.com
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