- Cryptocurrency market had a volatile week, with most assets stopping their victorious ascend.
- Bitcoin erased all weekly gains, returned to early Monday's levels.
- The long-term trend remains bullish for BTC/USD, FXStreet's Forecast Poll backs it up.
This week is a reminder of how volatile cryptocurrency market can be. A prolonged period of calmness lulled the market players into a false sense of complacency, and many of them had a nasty shock. Bitcoin and the majority of top altcoins stopped their victorious ascend to new highs and entered into a flash crash that erased nearly $20 billion of the total market value in a matter of minutes. While the coins recovered from the crash, most of them are still in a red zone when compared to the week’s opening levels.
What’s going on in the crypto universe
Comments, rumors, and speculations heard from Consensus 2019, the largest industry event that took place in New York, have been dominating the market movements this week. Bitfinex-Tether issues moved to the background as the community’s focus shifted onto mass adoption and signs of institutional engagement with blockchain and digital assets. While the rumors of eBay and TD Securities diving into the crypto space fake to be fake, the market remained excited about the crypto spring and possibilities that come with it.
The catalysts behind Bitcoin’s rise from $7,200 on Monday to $8,384 on Thursday are a mixture of positive sentiments inspired by comments coming out from Consensus conference and technical factors. Obviously, the upside movement was intensified by stop orders triggered as the prices moved through essential barriers.
On a regulatory front, the US SEC’s advisor on digital assets Valerie Szczepanik said that platforms that list IEO (Initial Exchange Offering) tokens for a fee act as broker-dealers, which means that they should be registered with the regulator.
These comments increased the uncertainty of the US regulatory environment and forced Poloniex to block access to certain assets for the US traders. While the market reaction to the announcement has been muted so far, it may take its toll later, if the crypto recovery from the recent flash crash stalls. In a separate development, the head of Bank of France expressed support for stablecoins, saying that this concept is more interesting than Bitcoins. This position goes against the view previously expressed by the head of the European Central Bank, Mario Draghi.
This week has been packed with altcoin news. Moreover, less popular coins like NEM, Tezos, Ontology are doing well on a week-on-week basis due to significant developments specific to these projects. Thus NEM has gained over 70% in recent seven days amid Catapult update announcement
BTC/USD, 1D chart
After a strong growth towards new 2019 high during the week, BTC/USD reversed gains and basically returned to Monday opening levels. Despite the discouraging sell-off into the weekend, the downside movement qualifies as a natural correction from overbought territory.
From the longer-term perspective, the first cryptocurrency retains a positive stance from the longer term perspective, trading above 23.6% Fibo retracement from a significant move from December 2017 high to December 2018 low seen at $7,100. Once it is cleared, the sell-off is likely to gain traction with the next focus on an upper boundary of a weekly Bollinger Band ($6,750) and 100 Simple Moving Average (100SMA) weekly ($6,500).
Considering that the weekly Relative Strength Index (RSI) stays flat, long-term bulls have little reason to panic, At least as long as the price stays above $6,000 and more importantly, above SMA50 weekly at $5,460. A sustainable move lower will but the bullish scenario at risk and bring new sellers to the market.
On the upside, we will need to see sustainable growth above $8,000 to mitigate immediate bearish pressure. This psychological barrier is strengthened by an upper boundary of 4-hour Bollinger Band and 38.2$ Fibo retracement daily. Once it is cleared, the upside may gain traction towards the recent high of $8,390 and proceed to $8,400, protected by an upper boundary of 1-day Bollinger Band. Basically, a sustainable breakthrough is all we need to start the bullish ball rolling again with the next target on $9,000 and beyond.
The Forecast Poll of experts improved since the previous week as expectations on a midterm and long term timeframes are bullish. All price estimations are well above $7,000 handle.
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