Is There Something Wrong with Bitcoin? (May 5 Forecast)

Is There Something Wrong with Bitcoin? (May 5 Forecast)

By Crypto Daily FX | Crypto Daily FX | 5 May 2021


Bitcoin fell on Tuesday, reaching up to the $57K level before pulling back, bouncing off the 50 Day EMA and closing the daily candle under $55K. This is a bearish candle as BTC continues to struggle around the 50 Day EMA, indicating a possible break lower.

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(May 4, 2021  8:30PM EST)

Short-Term: 

If Bitcoin breaks below the 50 Day EMA, we'll be looking for support levels at $50K and ~$47K, a fib retracement. Ultimately, there is a ton of bullish fundamentals that should buoy Bitcoin in the event of any dip or market correction: the lower BTC goes, the greater a chance of a bounce. It's worth noting that BTC has not yet tested the 200 Day EMA as support yet during this bull market cycle, however the 50 Day EMA has typically been a more reliable indicator as a support level/buying area as it is more frequently touched. However, we have to acknowledge that BTC can drop to $45K or even $40K to test support. I think this is likely to be extraordinarily supportive with a ton of buying pressure, assuming we even drop that low, which I think is less likely.

 

 

 

It's during times like these that we have to step back and consider all our investment criteria: 

Have the fundamentals changed? 

Has supply/demand changed? 

Has government regulation changed?

The answer to all of the above? No. 

In this case, this is a BTFD scenario in a bull market unless proven otherwise. In fact, the macro uptrend is not in question unless Bitcoin breaks below $40K and ultimately the 200 Day EMA around $35K, which should be our absolute floor at this point. As long as we stay above these levels, we're in bullish territory.

 

 

 

It's easy to let bearish sentiment distract from your vision if you don't have a sound technical strategy. 20-30% drops are significant and not uncommon in crypto, so it's especially important to zoom out and look at the charts to keep the bigger picture in the front of your mind. 

 

 

RSI has fallen again, currently at 44 on the daily chart and has been in a downtrend for nearly a month now. 

 

Bitcoin Dominance: 

Bitcoin Dominance broke below a major price area, dropping to about 46% as BTC continues to surrender crypto market cap to ETH and other altcoins. The next area to watch would be the 40% level which is roughly where Bitcoin peaked during the 2017 bull market. 

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Now, that's not to say that Bitcoin is necessarily about to peak or already has. In fact, when you look at a longer term BTC.D chart, you'll see that Bitcoin has gradually lost dominance to other projects over time as the crypto ecosystem continues to evolve and flourish. This is not necessarily bearish for BTC, however it's worth watching. 

 

 

Support: 50 Day EMA around $53,125, then $50K.

Resistance: $60K, then $70K, $80K, then $100K. 

 

Buy Bitcoin here.

Earn Crypto here.


Crypto Daily FX
Crypto Daily FX

Your Daily Support to Break Resistance.


Crypto Daily FX
Crypto Daily FX

Your Daily Support to Break Resistance.

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