Conferences, triangles and crosses: making sense of the BTC bear market with StormGain
2022年5月31日 - 02:09AM
NEWSBTC
The latest market information shows BTC/USD continuing to hover
around $29,000 after failing to hold the crucial $30,000 support.
BTC price movements, 15-25 May 2022. / Source: StormGain As the
original cryptocurrency stalls, traders and analysts are chiming in
with observations about what the next price movement could be. 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. Whether Bitcoin is set to
plunge below pre-2020 levels or not, there are useful strategies
that traders can employ to stay profitable even during a crypto
winter. BTC at the world economic forum Cryptocurrency was a
significant topic at the WEF summit, with multiple panels
concerning crypto, DeFi, and CBDCs featuring a mix of thought
leaders from the traditional finance, fintech and crypto sectors.
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. For
the moment, if crypto is still being treated mainly as an
investment asset, could the wider stock market hold a clue to the
next move? Relation with US stocks Bitcoin’s market behaviour
recently has been closely correlated with US stocks, especially
tech stocks. The latter sector, in particular, is struggling to
cope with the post-pandemic market adjustment, but the stock market
is showing positive signs of life. 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. One indicator being watched is the CME
futures gap. BTC futures are not traded 24/7 on the CME, so the
price there will often move to fill the gap between CME trading
close and open. BTC/USD did manage to close the CME futures gap on
the downside, so the expectation is that it will rebound to fill
it. However, it does not always do so swiftly. Crypto is still seen
as more of a risk asset than a safe haven, and even the current
weakness of the US dollar is not enough to send investors flocking
to Bitcoin. One factor is surely the US Federal Reserve, which is
raising dollar interest rates in an attempt to stave off 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. Looking at the BTC charts, we
can see a few interesting patterns that serve as a basis for price
analysis. The triangle: where will we see the breakout? Over the
last two weeks, Bitcoin’s price chart has formed a symmetrical
triangle in the narrow range of $28,900 to $30,900. It is likely
that this pattern will continue for another fortnight before
breaking out in either direction. BTC/USD chart showing symmetrical
triangle pattern. / Source: TradingView The symmetrical triangle
represents a pattern of lower peaks and higher lows as the triangle
narrows. Typically, the pattern ends in a bullish or bearish
breakout when the price moves beyond the support or resistance
threshold. The current investor mood is bearish, with most betting
on a downturn, but this increases the potential rewards for a
bullish position if developing economic trends catch bears by
surprise. This can happen if geopolitical events give an unexpected
boost to the economy. 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. This phenomenon occurs when the declining
50-period moving average (50MA) crosses under the 200MA.
Historically, the death cross signifies a significant price
downturn, and the current situation with BTC/USD indicates that a
death cross is imminent. 1hr BTC/USD chart showing MA cross
indicator / Source: StormGain Based on historical precedent, BTC
will drop following a death cross, usually by a percentage matching
the pre-cross drop. The current pre-cross drop was 43%, so we could
expect a price drop down to around $22K if this pattern holds.
However, during previous death crosses in 2020 and 2021, the cross
itself marked the bottom of the price action and the beginning of
an extraordinary rebound. Traders should watch the action around
the cross closely. If it appears to follow the previous two years,
then it would be a good time to buy before the recovery. If it
behaves like pre-2020 crosses, then we could roughly predict the
price will drop further. A two-year trough? What to know before
buying the dip Crypto market crashes have historically proven to be
good opportunities to buy up coins for cheap before selling them
for profit in the next bull run. For example, buying Bitcoin for
around $6K in 2020 and selling for $60K before 2022. Bitcoin is
currently expected to pull below $24K, and altcoins will follow the
first mover’s pattern. So, if anyone is picking up discount BTC,
when should they expect new highs? The long-term outlook for
Bitcoin will certainly test the patience of some traders. Popular
crypto Twitter commentator, Il Capo of Crypto (@CryptoCapo), set a
credible target: hodlers should only expect BTC to breach new
all-time highs in 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. At that point, Bitcoin has the potential to
surpass $70K and reach new heights. Historically, the bear market
periods for Bitcoin have been where retail traders buy into the
crypto market, and on-chain data shows that things are no different
now. But new traders must be patient and also prepare strategies to
survive the winter. Fortunately, the best crypto exchanges offer a
range of options to profit in both rising and falling markets.
Trading strategies to weather the winter StormGain is an all-in-one
crypto platform designed to enable profitable trading strategies
regardless of market conditions. Not only does it feature built-in
crypto wallets with bonuses for trading and holding in the long
term, but also low, low fees to help you seize those exciting
market opportunities as soon as they arise. This allows new traders
to buy the dip, enter the market at a discount price, and
accumulate crypto until the next bull run. For traders concerned
with risk management, StormGain also offers crypto indices. They
are asset bundles of different tokens to diversify your portfolio
to avoid being too exposed to the performance of any one asset
while being positioned to benefit from the market recovery overall.
In addition, traders can purchase call and put options to short the
price. If you believe the consensus that the market is likely to
fall in the short term, then shorting the price of crypto is a
viable strategy for profit in the bear market. Whatever strategy
you choose, StormGain rewards all traders with free BTC simply for
actively trading on the platform, thanks to its built-in Bitcoin
cloud miner. All of these features are available on StormGain’s
easy-to-use mobile app or web platform. Not a StormGain member yet?
To sweeten the pot, new StormGain clients who register by 31 May
2022 will receive a 20% bonus for their first deposit of 10 USDT or
more. Register in just a few seconds to join the crypto platform
with the best perks in the business!
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