Next Stop for BTC: $20,000 or $3,000?
Since last Thursday (2020/3/19), after a short stay in a sideways trend, Bitcoin has performed a upside movement. And on Friday (2020/3/20), it reached $6,892. But it failed to stay above $6,800, and consolidated around $6,000 — $6,500.
The U.S. Federal Reserve launched the Quantitative Easing (QE)– cutting benchmark interest rate to zero, which led to an excess of US dollar liquidity on the market. Therefore, investors who want to profit from the appreciation of US dollar, may better invest some of their capitals in cryptocurrency market for hedge purpose.
If Bitcoin cannot break above $6,900 and $7,000 this week, then we can predict that there will be a third wave of declining, which is likely to last for a short period and could reverse by the end of next week.
According to the daily chart, if Bitcoin starts a new downward movement, then it will retest the previous support level of $4,500-$5,000. It is also possible that it will break the support level and declined to new low to $3,000.
Despite the fact that Bitcoin price rebounded a lot since last weekend, the Moving Average on the daily chart suggests that another downtrend might be brewing. The Relative Strength Index (RSI) oscillator also stays below 40, which confirms that the upward movement is weak.
If the price nevertheless continues to rise without resuming the downward trend, we suggest you not to open a long position until the price stabilizes at $6,700-$7,000. And set Stop loss at $6,500.
In the case of a prolonged fall, when the price falls below the previous support level of $4,500-$5,000. And when the RSI oscillator line rises above 70, it will start the downtrend.
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Disclaimer
The material herein is provided for informational purposes only and should not be construed as investment advice or an offer or solicitation to buy or sell cryptocurrencies or derivatives. The material is not intended to be used as a general guide to investing, or as a source of any specific investment recommendations, and makes no implied or express recommendations concerning the manner in which any client’s account should or would be handled, as appropriate investment strategies depend upon the client’s investment objectives.
