Optimvest BTC report 21/05/21

Analysis by Oliver Page

Last week the cryptocurrency space was wild. Hourly crashes over 30%, hourly gains of over 60% and weekly losses of over 50%, the price action of the market this week has truly been something to behold.

Last week when BTC was at $50,000 USD we believed that there was substantial downside risk for BTC. In the conclusion we stated ‘BTC is looking bearish with a target of $44,000 — $42,000 USD within the next week / two weeks’. Additionally we believed that ‘BTC could fall through the floor and potentially make a move down to $38,000 USD’.

This week BTC fell further than any could have expected, as shown in the screenshot below…

This week’s BTC crash. CoinGecko screenshot

So what is the weekly outlook for BTC? Will there be further downside or could this be the bottom? Let’s take a look…

Bitcoins wild ride

In the chart below we can see that BTC moved down, trading sideways between two zones:

Zone 1 — sideways movement between $51.5K to $46.5K. BTC then fell to $42.0K before hitting zone two.

Zone 2 — sideways movement between $46.0K to $42.0K. BTC then fell to $38.0K.

After falling below the key $38K zone, BTC then collapsed to $30.0K. However BTC is starting to stabilize again around $38K USD.

BTC/USD

During this period BTC lost significant value. However, alt coins saw even larger price losses. Here are a select few alt coins which have lost significant value.

Most alt/BTC charts are now bearish and with BTC currently highly unstable, alt coins are looking like a fast route to seeing major losses in your portfolio. Therefore staying away from both spot and perpetual contracts with alt coins, looks to be a wise decision until we get a clearer BTC picture.

Elon adding fuel to the bearish fire

Last week I spoke about Elon Musk´s twitter account, we will look at it again in this week’s article. Musk has turned from hero to villain in a matter of weeks for cryptocurrency investors with his tweets consistently hurting BTCs price.

In reference to responses of his BTC environmental criticism comments
In response to Saylors BTC video response

At this moment in time, the influence which Elon Musk has over the cryptocurrency market is concerning. The market is becoming something of a reality T.V show, blue ticked Twitter accounts throwing insults back and forth over BTC and DOGE.

This has led to many cryptocurrency enthusiasts calling for Musk to be investigated for market manipulation and for TSLA to sell all BTC holdings.

BTC outlook

One reason for BTCs downfall was due to the negative breakout of the descending wedge shown below. BTC has now risen back up to $38K from $30K, resistance found at the previous support / resistance from the descending wedge. It currently looks likely that BTC will trade sideways for a short period of time before the next move is clear.

BTC/USD chart

BTC conclusion

If BTC breaks above $43K and the RSI hits 70–80 then finding support at 40, BTC will be bullish and the short term bearish run is over. In order to end the medium term bearish run BTC has entered, BTC will need to break above $59.4K.

However a move above this level currently looks highly unlikely. On the whole BTC is still looking bearish as there are no bullish signs from indicators on the hourly, daily, & weekly. Additionally there are no TA formations, therefore the overall sentiment remains bearish for the time being.

Although in the medium term it is clear that BTC will at some point have a leg up and make a new LH. BTC is definitely in an uncertain period currently from a technical analysis perspective.

BTC/USD

Analysis by Oliver Page

Currency management firm founded in Switzerland in 1998, offering a unique experience in currency strategies.