Pavel Gromov, a practicing trader, tells about the current situation on the market.
From the range of $8500-$9200, where bitcoin was for more than a week, there was a powerful exit up. Yesterday, the price of the main cryptocurrency overcame resistance at $9500 and $9800, and today it tested $10,000.
This review stated that the March drop in bitcoin was short-term. Since that time, bitcoin has doubled. This once again confirms the thesis: you should buy when everyone is selling.
What about traditional markets?
The stock markets are in an unstable balance. The fall on may 1 was redeemed. Donald trump's aggressive rhetoric towards China did not convince the markets. Everyone understands that to escalate tension and collapse the markets in the current situation is unprofitable, first of all, for Trump himself.
The S&P 500 did not go below 2800, but it has not been able to return above 2900 since April 29. There is no reason for growth. Economic indicators do not give hints of a positive. The money poured into the economy by Central banks does not allow to fall.
Now Asian markets show a slight increase. For us markets today, the direction of movement will be set by data from the labor market (non farm payroll).
What's on the cryptocurrency market?
Altcoins do not support the growth of bitcoin. The dominance index exceeded a three-month high. Top coins rose to the dollar minimally, but to bitcoin fell much more than even on March 12-13.
It is clear that the market is waiting for a denouement around halving bitcoin. There are only two main options.
1. Growth to $10,400-$10,500 before halving, and then falling. In favor of this option, the growth of interest in halving on Google Trends and the entry of new money into the market, which goes to bitcoin and increases its dominance. As you know, the crowd in the market never wins, and if the crowd waits for growth and buys, the market will go down. It was in 2017 at the launch of CME futures, it was in 2019 at Bakkt expectations. The halving story may well continue this list.
2. Drop right now (today or on the weekend) to $8800-$9000, reset the crowd stops and move to $10,500 next week from there.
In my opinion, the first option is the most likely, and this is its disadvantage. After all, there is a third option-fixing over $10,500.
This option is supported by inflationary expectations due to the huge injections of liquidity into the economy over the past two months, as well as the fact that few people are waiting for this option. I think the first option is more likely, but I am ready for the third. The denouement will come in a few days.
For the medium-term prospects of bitcoin, the short-term reaction to halving does not matter much.
What do the charts say?
On the daily timeframe, I want to pay attention to the dynamic resistance zone (the blue line on the chart).
This zone is the upper limit of the medium-term downtrend from December 2017, which also coincides with the horizontal resistance levels of $10,867 and $11,368.
After bitcoin has left the accumulation zone (range $8600-$9000), there is a high probability that the growth will continue to this range ($10 867-$11 368).
Canceling this scenario is a breakout and fixing below $8850.