Predictions for BTC — Will it continue to rise or crash suddenly?
Bitcoin continues to be in the spotlight, as its valuation had managed to reach almost $65,000 during the first half of April 2021. Valuations are still near historical levels and due to the speculative nature of the crypto assets, people are increasingly asking whether there will be enough buying momentum to sustain the current elevated price. Markets Legion will use its expertise to provide several valuable insights, even though a 100% accurate prediction is not possible, since so many different variables can impact BTC.
Bitcoin unable to remain above $60,000
Looking at the weekly Bitcoin chart, it can be easily noticed that the price did not manage to close above $60,000, suggesting that’s an area where the selling pressure is exceeding the buying interest. Also, there’s more than a year since a reversion to the mean had occurred, creating a higher downside vulnerability.
The high demand for BTC, combined with lower new supply after the halving, created a massive upside pressure, leading to the massive bull run witnessed since the end of Q1 2021. Bitcoin is the most popular crypto and available for trading at marketslegion.com, which is enabling the wider public to take advantage of volatile price action movements.
From a technical point of view, there are no signs of topping formation for now, but a weeks-long corrective move should not be ruled out, considering the extreme overbought conditions on higher time frames.
Regulatory pressures to dominate
For a few days in a row, Bitcoin had started to underperform, dropping to almost $50,000 as sellers regained control over the order flow. One of the major news that sparked selling interest came from Turkey, where the central bank banned the use of crypto as a payment method.
It’s not the first time when markets get scared by regulatory pressure. This is one of the highest threats for decentralized payment systems such as Bitcoin, even though many companies are now accepting BTC payments for their products or services.
Judging by crypto volume, Turkey is not among the top countries using BTC or other tokens, but the psychological effect can act as a domino if other nations will follow on the same path in the near term. Cryptocurrency traders and investors will need to remain cautious and monitor all the relevant market news closely, to not get caught off-guard by an unexpected wave of BTC selling.
Price action overstretched
The new Bitcoin supply will continue to be cut in half every 4 years and as long as the demand will be elevated, the price can theoretically advance higher. However, as the performance seen in 2018 had thought market participants, BTC can move lower impulsively as well.
Based on the current price action structure, Bitcoin remains in a position vulnerable to pullbacks. A corrective move towards the weekly 20 EMA did not occur since August 2020 and if that will be the case for the next few weeks, the BTC price can weaken below $50,000. Even in that case, most of the gains banked for the past year will remain intact.
A longer correction due?
Regardless of the elevated buying momentum, prices can’t simply move up in a straight line. Naturally, there are pullbacks along the way, as well as periods of consolidation. Bitcoin is starting to show signs of weakness around $60,000, which is why buyers could be waiting for a longer correction to form, before starting to buy more aggressively.
The long-term prospects for Bitcoin continue to be favorable, as now the institutional interest has surged. However, traders should not become complacent, since that is when the market can take a south turn.
