Bitcoin recently after a heavy fall is trading sideways and at present we are trading near the top of the range can we breakout to the upside or will we turn lower? Our view of the fundamentals, sentiment and technicals below…
Bitcoin has been trading inside a range of 32/38k range since the big May sell-off. This is the main range, but traders have tried pushing it both to the upside and downside but these breakouts have simply reverted back to the range.
We are expecting the move to the upside to fail. We are looking for a move down to the bottom of the range and longer term expect the bottom of the range to give way but there are a lot of traders who are heavily bullish:
“Bitcoin Back on Track Towards $100,000” This projection is from Bloomberg Intelligence analyst Mike McGlone’s and he’s very bullish! What is his logic behind the view? McGlone thinks that bitcoin is set to turn the $40,000 level into support:
“This year is prime for bitcoin to take the next step in its price-discovery stage and we see a refreshed bull market. Bitcoin appears to have built a base around $30,000 that’s akin to $4,000 at the start of 2019, and we see performance parallels that could get the benchmark crypto back on track toward $100,000.”
We don’t share this view the fundamentals have changed behind the chart in the last 3 years. In our view, Bitcoin will never get mainstream acceptance due to the hostility of central banks and regulators who are now more vocal and active about Bitcoin than they were a few years ago.
The fact remains its main usage is organized crime and it’s estimated that criminal money accounted for around $200 billion last year in transactions.
Bitcoin has no fundamental value and will never attract big institutional money so cannot be seen as a store of value or a safe haven and trading in gold the traditional safe haven far exceeds Bitcoin.
In the short term, we think Bitcoin is a sell into the top of the range for another test of daily support but if this were to give way we could see a massive fall all the way back to the 1.000 level on the monthly chart as the retail buy and hold traders who are a large proportion of open interest.
In terms of trading the short side on the daily chart our view of the key levels is below and also the longer term monthly chart.
Research provided by LearnCurrencyTradingOnline.com
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