- Bitcoin has had volatile week moving in $2,000 range.
- Halving produced no immediate effect on the price.
- BTC/USD needs to regain $10,000 to extend the recovery.
Bitcoin lived through another volatile week. The first digital coin crashed to $8,100 on May 10 and jumped to $9,944 om Thursday, May 14. Thus, the price range reached nearly $2,000. At the time of writing, BTC/USD is changing hands at $9,600 as the market is getting ready to another attempt to break above $10,000.
Welcome to post-halving reality
People say that halving was essentially a non-event, and they are quite right when it comes to the initial market reaction to the announcement that the block reward was reduced. However, halving is not a regular macro event like a monetary policy announcement or inflation rate report. It is just a milestone in the network evolution that might have a long-term consequence, but have no immediate effect on the price as it contains no new information for the market participants.
In fact, the event was overhyped, which created a highly volatile environment ahead of the halving. Many experts believed that the price may decrease due to “buy the rumor, sell the fact” effect, but that scenario was played out ahead of the event. Actually, BTC/USD experienced a short-lived sell-off but quickly regained the ground.
The tide is changing
Meanwhile, the long-term forecasts remain mostly bullish, and halving is only a part of the equation. According to Morgan Creek Digital co-founder Antony Pompliano, institutional investors are changing their attitude to Bitcoin, while banks start providing services to cryptocurrency exchanges. Speaking in the interview with Yahoo Finance, he explained:
“Bitcoin is not going away. You’re starting to see a lot of Wall Street investors actually putting it in their portfolios. And they’re starting to also have some track record for these exchanges or businesses, so they can see the financial performance. So I think ultimately, what you’re really going to start to see is banks can’t ignore this space.”
This trend is likely to continue as exchanges and cryptocurrency investment funds launch new derivatives and complex instruments that allow large players to get exposure to this lucrative market observing the existing regulatory requirements.
Telegram’s TON ceased to exist, who’s next
Pavel Durov, the founder of Telegram, officially closed the blockchain project that promised to revolutionize lots of things, including the way we send money to each other. He referred to regulatory barriers as to the main reason behind this decision. The news did not come as a total shock as the project has been facing regulatory issues for quite some time. However, it proved the government is the real force that can kill any project that is regarded as a threat.
According to Pantera Capital Founder, Dr. Steven Waterhouse, Facebook’s Libra faces similar risks as the US government won’t let any private enterprise challenge the dollar or compete with the existing financial system. He pointed out, that Facebook or Telegram, or any other random startup that will try to build their stablecoins that can potentially challenge the central bank digital currency or existing fiat currencies are doomed to get a strong reaction from the regulators.
BTC/USD: Technical picture
Bitcoin risks to break a bullish pattern of eight successive green weekly candles, if it fails to develop s strong bullish momentum in the nearest session. This development may signal that the price of the first digital coin may enter a downside correction before another bullish wave.
BTC/USD weekly chart
The initial strong support is created by a $9,000-$9,200 area that served as a resistance for BTC in the middle of May. Now it has the potential to mitigate the bearish pressure and attract new buying interest. If it is broken, the sell-off may be extended towards weekly SMA50. If it fails to stop the carnage, $8,100 will come into focus. This is the lowest level of the week, reinforced by 23.6% Fibo retracement for the downside move from February 2020 high. The next support comes at $7,490 (the lowest level of the previous week). Also, this support area was mentioned by Nicholas Pelecanos from NEM Ventures.
On the upside, once the price is above $9,800, the recovery may be extended towards a psychological $10,000. Moreover, this barrier is reinforced by 38.2% Fibo retracement for the downside move from July 2019 high to December 2019 low. A sustainable move above this area will open up the way to $10,500, which is the highest level of 2020.
BTC/USD daily chart
The Forecast Poll showed a significant improvement. The forecast is bullish both on the long-term and short-term timeframe mixed picture. It means that the market participants take an optimistic view and get ready for a post-halving rally. Meanwhile, the price expectations on all time-frames are below $10,000.
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