Bitcoin Price Top Forecast: fundamentally robust, technically handicapped

Bitcoin (BTC) partially reversed the gains made during the previous week. The first digital coin has lost nearly 3% in recent seven days as the cryptocurrency market drifted lower following a steady growth during the weekend. 

Meanwhile, despite a tiresome consolidation with rare bouts of volatility, February became the first green month since July 2018. This is a notable development that might signal that the market has bottomed out eventually; however, we cannot say that for sure as long as the price stays below critical resistance levels. Thus we will need to see a sustainable move above $4,000-$4,200 handle to confirm the recovery is in place, while a strong move above $5,000 will create a pre-condition for a longer-term trend reversal.

What’s going on in the market

We have seen several fundamental developments this week, signaling a wider cryptocurrency adoption by institutional investors.

Thus, Julius Baer, one of the largest private banks in Switzerland, announced a partnership with SEBA to offer its customers cryptocurrency-related services. Julius Baer mentioned growing demand among the customers as one of the main drivers behind the decision. In a separate development, Coinsuper, a Hong Kong-based cryptocurrency exchange with 1M registered users is allegedly pivoting institutional investors. Basically, we observe the trend where the market becomes more mature and saturated by professional players. 

Coinbase finally listed Ripple’s XRP token, which is now available both to pro users and to retail traders via Coinbase.com and mobile apps of the exchange. While some experts consider a move somewhat controversial and even accuse Coinbase of insider trading ahead of the announcement, the decision will boost XRP popularity. 

Though it is worth noting, that Ripple has never positioned its coin as a means of payment for everyday needs. It is focused on providing payment solutions for banks and financial institutions, facilitating international transactions. Interestingly, CEO of SBI Group came up with an optimistic forecast, saying all banks in Japan that XRP will use XRP by 2025.

Russia also made headlines this week. The Russian president Vladimir Putin ordered to adopt pending cryptocurrency legislation by July 1, 2019. By creating a clear regulatory framework, the country may attract much0needed investments and diversify its economy away from oil and gas revenues. Notably, earlier this week the former Energy Minister of the Russian Federation hinted on oil-backed cryptocurrency that may be issued in Russia once the legislation is in place.

Elsewhere, Ethereum successfully upgraded. It has been a long journey to Constantinople, but now everything is over. Traders and investors were wary, expecting a strong growth of volatility, but the process was smooth, and the price showed little reaction.

BTC/USD, 1D chart

From the longer-term perspective, BTC/USD is still supported by weekly SMA ($3,380). If this critical barrier is cleared, the sell-off may be extended towards the next significant hurdle created by SMA50 (monthly) at $3,167 with the next aim at psychological $3,000. This scenario cannot be excluded, considering that the Relative Strength Index (RSI) on weekly charts points downward.

In the short-term, the support is created by DMA100 at $3,700 and followed by DMA50 on approach to $3,500. The upside momentum is hindered by a cluster of technical levels located above the current price ($3,816) and up to $3,900. Once this barrier is out of the way, the recovery may be extended towards $4,000 and $4,187 (February high). 

However, we need to see a sustainable move above $5,000 to claim the trend reversal. This area might prove to be a hard nut to crack as it is guarded by DMA200. Moreover, a lot of cryptocurrency experts, including Tron’s founder Justin Sun, expect Bitcoin to sit in a range limited by $5,000. 

The Forecast Poll of experts shows that the market is still optimistic about BTC recovery. The short and mid-term forecasts are mostly bullish, while the longer-term expectations are neutral. Estimates have slipped a bit lower during the past week.