During the last month and a half, we witnessed the rebound of the number one cryptocurrency in the market. Not that the other coins are performing worse, but, naturally, the leader of the pack is something we're most interested in. Today, those who were following the price movement could have witnessed how Bitcoin smashes through the psychological $8,000 barrier.
In an all-encompassing wave of optimism, the price is now pushing towards $9,000 with the current value of $8,800 per coin. But can BTC sustain the momentum? Let us combine a variety of aspects in order to see if we are to break into some higher levels and if crypto is in a favorable position at all while the world struggles to recuperate from COVID-19.
The Technicals
From the purely technical point of view, this surge was nothing unexpected as CoinSyncom already published an analysis that predicted such a movement on February 10th. Nevertheless, for those who missed it, here is a brief recap.
Source: Coinalyze.net
Obviously, Bitcoin is inside a gargantuan descending triangle since September 2017. It has finally been confirmed when it dropped to $3,500 in early March this year, making this the third time it bounced off that support line.
As it is visible in the weekly chart above, BTC has some more room to grow until it encounters that declining resistance trend line. According to our analysis, the range we are looking at is in the area from $9,400 to $9,600. This is going to show us if Bitcoin has enough strength to provide at least some foreshadow of a positive price movement prior to halving.
Let's zoom into the daily chart to see what's happening with some more immediate resistance levels.
The hourly chart above shows the resistance level at approximately $9,100. Not just that it is the next important level, but it is historically proven to be crucial in more than a few occasions. Therefore, if you are in a long position, do be careful about planning your exit strategy.
The Fundamental Aspect
Since the global economic situation is everything but normal, we are due to count it in as a wheel that cannot be overlooked when trying to determine Bitcoin's mid term growth potential.
Of course, the COVID-19 pandemic has ravaged the global economy in such a way that there are only a few safe havens left standing. Gold and silver are such assets that have the utility that can't be denied. Their use in electronics and various other industries make them unavoidable material per se.
On the other hand, the situation with Bitcoin is diametrically opposite. Bitcoin, just the same as fiat, needs the people to believe that it has the ability to solve problems. Other than that, it just becomes another subject of speculation without any real substance. Or better yet, something people can easily live without.
In times of economic crisis, things that people can live without experience the worst breakdowns. However, cryptocurrencies, in general, are still viewed as a step forward from the traditional financial system by most crypto enthusiasts. However, enthusiasts are not enough to push the price upward substantially.
If, let's call them unaligned investors find Bitcoin (and some other cryptocurrencies) to be on a safe distance from goverments to provide a viable independant asset during the time of crisis, the price will respond accordingly by, perhaps, scoring a new all-time high after halving. Nevertheless, that will largely depend on the global politics and the way that world leaders will deal with the aftermath of a global lockdown.
If the public start feel pressurized by the measures taken by their governments, one viable option for them is definitely Bitcoin. On the other hand, if governments provide the reason for the average Joe to trust them, Bitcoin will again become an interesting nowelty, but nothing more. As such, its long-anticipated role as a real alternative for the financial establishement will be lost.
What Should be Done to Promote Crypto as a Viable Crisis Option?
For starters, let's make a point that, when newbies came into crypto, maybe we all instructed them in a fundamentally wrong way. In order to protect ourselves from the wrath of a person who just lost half of his life savings, we used to say:
Invest only the money you are prepared to lose!
From this perspective, maybe we all were terribly wrong. Instead of inspiring fear, if we truly believed in the technology, we should have instructed them to invest in crypto if they want to preserve the value of their money. This way, we wouldn't present Bitcoin as an asset to make a quick buck on, but present it as a viable solution for value preservation.
However, we have what we have and the future of crypto is more than insecure once the economy comes collapsing down on our heads. And let's face it, looking at the direction the world is going in, it seems to be inevitable.
Therefore, for the time being, $9,100 is as much as we can currently ask from Bitcoin. Even more so because, as we already stated in one of our previous pieces, BTC has never come so close to halving in such a bearish sentiment. Furthermore, those who are looking at the halving as a bullish trigger might come to a rude awakening since, historically, Bitcoin never achieved a new high in the year of the halving. Moreover, it takes BTC more time to reach a new peak each time.
In any case, the next month will provide at least some answers. One is to the following question:
Is Bitcoin ready to become more than a subject of speculation and market manipulation?
The affirmative will mean that we are entering a whole other phase in the life of cryptocurrencies. The one that shall, possibly, finally establish them as a viable means of payment and perhaps even make a wider population think about decentralization as something that might present a good alternative for the 21st century.
Please, do let us know what do you think about the subject in the comments section below the article.
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Originally published on CoinSyncom: https://coinsyn.com/bitcoin-smashes-through-8000/