In recent days we have seen Gold break above $1,800 as the number of COVID-19 cases continue to rise. At one stage Bitcoin was seen as the digital equivalent to safe havens like Gold and the CHF. However, not since August last year has BTCUSD traded above $10,000 for consecutive days.
Many including the Fed, IMF and World Bank are all forecasting further contractions to the world's economy. So what exactly is happening with cryptocurrencies, and will new highs eventually become a reality?
Current market opportunity
Typically when we think of the “Bitcoin Boom” we remember the winter of 2017, where prices rocketed in a short period. One move saw, values go from $6,300 to over $10,000 all in under 3 weeks of trading.
However today, with the COVID-19 crisis in full swing, we’ve seen similar levels of volatility from traditional markets, meaning traders have opted to find opportunities within those instead of crypto.
Equities for example, have rebounded sharply in recent months, with the NASDAQ creating multiple new record highs as a result. Plus the S&P500 and Dow Jones, a stone throws away from recapturing new highs.
Yet, the potential for a huge move in Crypto still remains, are bulls preparing for another run?
Previously in 2017, when many were making crypto predictions, there was no real history, or technical indicators to validate forecasts. However 3 years on, the landscape has changed, with many now able to look back in order to gauge how things may look going forward.
When BTCUSD dropped by 50% in early April, and landed on the $3,768, traders were able to look back and see a lot of buying typically took place at that level. So the second the prices hit the floor, we saw an immediate rally, which led us back to the $10,000 resistance level.
Now as we enter Q3, history shows us that there is still an upside from where we are now. The potential for the moving averages to shift from consolidation, to upwards momentum could see the $10,000 level broken, with markets heading for the next resistance level of $14,600.
At which point we can ask similar questions about the potential for $20,000.
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