BTC/USD is still hovering around $29,000, despite having lost the critical $30,000 support.
BTC price movements 15-25 May 2022 StormGain
The original cryptocurrency is in a stall state. Analysts and traders have been weighing in on what could happen next to predict the price. Some are looking for positive signs from the ongoing World Economic Forum (WEF) Annual Meeting at Davos, while others are pointing to historical chart patterns or highlighting cryptocurrency’s correlations with the wider stock market. No matter if Bitcoin plummets below its pre-2020 level, traders still have options to make money in crypto winter.
BTC in the World Economic Forum
At the WEF summit cryptocurrency was an important topic. The WEF summit featured multiple panels about crypto, DeFi and CBDCs. They were led by thought leaders in traditional finance, cryptotech, as well as crypto. Miami mayor Francis Suarez spoke in support of crypto’s innovative uses amidst the bear market: “We live in a world where investors only look at things from a return perspective, but Bitcoin should be seen from an innovative and technology perspective”. Jeremy Allaire, chairman and CEO at Circle Pay, and Brad Garlinghouse, CEO of Ripple, were also present, exploring crypto’s potential for cross-border payments and national stablecoins.
Despite crypto being a hot topic, however, Bitcoin’s market price does not appear to have been meaningfully affected by discussions at the conference this week. Nonetheless, it is a sign that cryptocurrency’s outsider status in the global economic system is a thing of the past. The stock market could be a hint at the future if cryptocurrency is being treated as an investment asset.
Relations with US stocks
Bitcoin’s market behaviour recently has been closely correlated with US stocks, especially tech stocks. The post-pandemic market adjustments are particularly difficult for the tech stocks sector. But, there is some hope as the stock markets show signs of improvement. The S&P 500, Dow and Nasdaq have all started to rise up after a heavy rout, which is a positive indicator for crypto, too.
CME futures gap is one indicator to watch. BTC futures cannot be traded on the CME 24/7, so they will move frequently to close the gap between CME open and close trading. BTC/USD was able to close the CME Futures gap, but it did not do it on the upside. So it is likely that it will fill the gap. But it doesn’t always succeed so fast.
Crypto continues to be seen more as a risk asset rather than a safety haven. Investors are not encouraged to flock to Bitcoin because of the weakening US dollar. A factor that could be influencing this is the US Federal Reserve. They are raising interest rates on dollars to prevent inflation.
Given crypto’s famous volatility compared to the stock market, a breakout for Bitcoin and Co. could be more sudden and dramatic than anything occurring on Wall Street. We can observe some interesting patterns in the BTC charts that could be used as an indicator of price trends.
The triangle: How will we spot the break?
Over the last two weeks, Bitcoin’s price chart has formed a symmetrical triangle in the narrow range of $28,900 to $30,900. The pattern should continue for another week before it changes direction.
BTC/USD chart showing the symmetrical triangle pattern. TradingView
As the triangle narrows, it creates a pattern with lower peak and higher lowest points. When the price exceeds the threshold of support or resistance, it ends in either a bearish or bullish breakout. This current investor mood favors a downturn. However, this can increase the rewards for a bullish position in case emerging economic trends surprise bears. If geopolitical developments give unexpected support to the economy, this can occur.
The Crypto Fear & Greed Index has been locked into “extreme fear” all month, with a small recovery this week that suggests that the bearish offensive may be relaxing slightly, especially if BTC recovers above $30,000. As we near the triangle’s breakout point, the adage of being brave when all others are fearful may encourage bulls to take a risk for a correspondingly high reward.
The death cross prediction
Analysts have been discussing the so-called “death cross” patterns on the Bitcoin chart. The phenomenon happens when the declining 50-period Moving Average (50MA), crosses beneath the 200MA. A death cross historically signifies significant price fall, as evidenced by the BTC/USD situation.
1hr chart BTC/USD showing MA cross indicator / StormGain
According to historical precedent, BTC prices will fall following a death crossing, almost always by the same percentage as before. If this trend continues, we can expect to see a drop in price of around $22K. However, death crosses from 2021 and 2020 marked the end of price action, and the start of an amazing rebound.
Trader should be attentive to what is happening around the cross. It should be following the same pattern as the past two years. If this happens, it is a great time to invest before the recovery. We can predict how much it will fall if it acts like the pre-2020 crosses.
How long is it going to be before the trough hits? Before you buy the dip, here are some things to consider
The crypto market crash has historically been a great opportunity to purchase coins cheaply before making a profit during the next bull cycle. You could buy Bitcoin at $6K and sell it for $60K by 2022. Bitcoin is currently expected to pull below $24K, and altcoins will follow the first mover’s pattern. What is the best time to buy discount Bitcoin? Some traders will be tested by the long-term prospects for Bitcoin.
Il Capo (@CryptoCapo), a well-known crypto commentator and Twitter user, set an achievable target. He said that hodlers should expect Bitcoin to surpass all-time highs by 2024. Why? Bitcoin’s next block halving is scheduled for that year, and the reward given to miners will drop from 6.25 BTC to 3.125 BTC per block, slowing the supply and making buying more attractive. Bitcoin could reach new heights and surpass $70K at that time.
The bear markets for Bitcoin historically have seen retail traders buying into the market. This is consistent with on-chain data. However, new traders should be patient and prepare for the winter. The best cryptocurrency exchanges provide a variety of opportunities to make money in rising and declining markets.
Winter weather strategies: Trading strategies
StormGain is a complete crypto platform. It can be used to facilitate profitable trading strategies, regardless of market conditions. It features built-in cryptocurrency wallets that offer bonuses for long-term trading or holding, as well as low, low fees. This allows you to seize market opportunities when they present themselves. It allows traders to purchase the dip at a discounted price and build crypto over time.
StormGain offers crypto-indices for traders who are concerned about risk management. These are asset bundles that contain different tokens. They can be used to diversify your portfolio and avoid over-exposure to any particular asset, while still allowing you to take advantage of the market’s recovery.
A trader can also purchase options for call or put to shorten the price. Shorting crypto’s price is an option if you think the market will fall soon.
StormGain offers free BTC to all traders, regardless of their strategy, simply by trading on its platform.
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