The recent turmoil in the oil futures market, including the unprecedented negative pricing of West Texas Intermediate (WTI) crude, significantly impacted traditional equity markets. However, it did not trigger any notable decline in the cryptocurrency markets. This is a positive sign, suggesting that digital assets are gradually decoupling from other risk-associated traditional investments.
A recent Bloomberg report outlined several reasons supporting the view that Bitcoin is poised for a major bull run in 2020. The report highlighted that the "unprecedented monetary stimulus" following the COVID-19 crisis is likely to benefit both gold and Bitcoin. Many are now referring to Bitcoin as 'digital gold,' a sign that mainstream media is increasingly acknowledging its potential, a point long championed by cryptocurrency enthusiasts.
As a new asset class, the transition from traditional fiat currencies to cryptocurrencies will take time. This slow pace of change can sometimes test the patience of investors. Veteran trader Peter Brandt recently questioned whether Bitcoin is truly living up to its high expectations, pointing to low levels of corporate engagement as a reason for his concern about its adoption.
While the world enters a new wave of money printing, the upcoming Bitcoin halving, set against the backdrop of a major global crisis, serves as a powerful reminder of its fundamental difference from fiat. Global events and political aspirations cannot manipulate its supply. Advantages like these could gradually attract more people to cryptocurrencies, potentially accelerating adoption rates due to the current economic climate.
In-Depth Market Analysis
BTC/USD
Bitcoin (BTC) has been trading within a range of $6,471.71 to $7,454.17 over the past several days, showing no clear directional bias. The 20-day Exponential Moving Average (EMA) at $6,931 is flat, and the Relative Strength Index (RSI) is hovering around the 50 mark, indicating a balance between bulls and bears.
A symmetrical triangle pattern, which typically acts as a continuation pattern, is forming within this range. If the bulls can push the BTC/USD pair above this triangle, it would be the first indication that they have gained the upper hand, making an upward move likely.
A breakout above $7,454.17 could lead to a rapid move towards the $8,000 level. While bears may mount a defense here, it is likely to be scaled. Above this, the upward move could extend to targets near $9,000.
Conversely, if the bears sink the pair below the triangle's support, it would indicate weakness. A breakdown could see the price fall to retest $6,471.71. If that level fails to hold, a further drop toward $5,600 is possible. Therefore, stop-losses on long positions can be trailed to $6,200.
ETH/USD
Ether (ETH) is currently trading within an ascending channel. On April 20th, bulls bought the dip near the 20-day EMA ($162.60), which is a positive signal showing that sentiment remains bullish on pullbacks.
The 20-day EMA ($165.23) is sloping up, and the RSI is in positive territory, suggesting that the bulls have an advantage.
If buyers can propel the ETH/USD pair above the immediate resistance at $176.103, a move towards the channel's resistance line is possible. This level may act as a stiff resistance again, but if the bulls can drive the price above the channel, a rally toward $250 becomes likely.
The bearish scenario would come into play if the price breaks down below the ascending channel and the crucial horizontal support at $148. A break below this level could result in a deeper correction. Thus, long positions can be protected with a stop-loss at $145.
XRP/USD
Bulls bought the dip to the support zone between $0.17372 and $0.20570 on April 20th. While this is positive, their failure to push XRP above the downsloping trendline could indicate a lack of demand at higher levels.
Currently, both moving averages are flat, and the RSI is also near the midpoint, suggesting a state of equilibrium between buyers and sellers.
The XRP/USD pair is likely to pick up momentum after the price breaks above $0.20570. Above this level, a rally to $0.25 is possible.
However, if the pair turns down from the current levels or the downtrend line and breaks below $0.17372, it will indicate that the bears are in command. Therefore, the stop-loss on long positions can be kept at $0.165.
BCH/USD
Bitcoin Cash (BCH) has been trading below its moving averages since April 20th, which is a negative sign. A bearish head and shoulders pattern is also developing, which will complete on a break below the $200 neckline.
If the BCH/USD pair sustains below $200, the measured target of the H&S pattern is near $119.53. Therefore, long positions should be protected with a stop-loss at $197.
This bearish view will be invalidated if the bulls can push the price back above the moving averages and the overhead resistance at $250. Such a move will indicate strength. Momentum could pick up above $280.47, opening the doors for a possible rally to $350.
BSV/USD
Bitcoin SV (BSV) is attempting to bounce off the support line of a symmetrical triangle. The next trending move is likely to begin after the price breaks out or breaks down from the triangle. Currently, the 20-day EMA ($187.95) is flat and the RSI is near the midpoint, suggesting a balance between supply and demand.
A breakout from the triangle will be the first indication that the bulls have gained the upper hand. The bears might again defend the overhead resistance at $227, but if this level is crossed, an upward move to $268.842 is possible.
Conversely, if the bears sink the price below the triangle and the horizontal support at $170, the BSV/USD pair could decline to $110. Therefore, the stop-loss on long positions can be placed at $165.
LTC/USD
Litecoin (LTC) dipped below the 20-day EMA on April 20th, but the bears could not sink the price to the horizontal support at $37.8582. The altcoin is attempting a rebound from $39.5823, a positive sign as it shows that bulls are intervening at a higher level.
If the LTC/USD pair breaks out of the overhead resistance zone between $43.67 and $47.6551, a rally to $52.2767 and then to $63 is possible.
On the other hand, if the price turns down from the overhead resistance zone, it can drop to $35.8582. A break below this support could be a significant negative, indicating that the bears are in control. Therefore, the stop-loss on long positions can be kept at $35.
EOS/USD
EOS has been range-bound between $2.3314 and $2.8319 for the past several days. The 20-day EMA ($2.54) is flat and the RSI is just above the midpoint, suggesting a balance between buyers and sellers.
The advantage will tilt in favor of the bulls on a break above the overhead resistance at $2.8319. A breakout of the range gives the EOS/USD pair a target objective of $3.3324. If this level is also crossed, the next level to watch on the upside is $3.8811.
This view will be invalidated if the pair breaks down from the range at $2.3314. Such a move will give it a target objective of $1.8309. The stop-loss on long positions can be maintained at $2.20.
BNB/USD
Although Binance Coin (BNB) broke below the bearish rising wedge pattern on April 20th, the bulls defended the 20-day EMA ($14.88). This is a positive sign, as it shows that traders are buying the dips to the 20-day EMA.
The gradually rising 20-day EMA and the RSI in the positive territory suggest that the bulls have a slight edge. If the bulls can push the price above the wedge's resistance line, it will invalidate the bearish pattern. The next level to watch on the upside is $21.50.
However, if the current rebound fizzles out and the price turns down and breaks below the 20-day EMA, it will indicate weakness. A break below the horizontal support at $13.65 will increase the possibility of a deeper decline. Therefore, the protective stop-loss on long positions can be retained at $13.
XTZ/USD
Tezos (XTZ) dipped below the breakout level of $2.185 on April 20th but found support just above the 20-day EMA ($2). This is a positive sign, as it shows that traders are buying the dips to the 20-day EMA.
Currently, the bulls are attempting to push the XTZ/USD pair above the overhead resistance at $2.3756. If successful, a retest of $2.75 is likely. The rising 20-day EMA and the RSI in the positive territory suggest that the bulls have the advantage.
This bullish view will be negated if the pair turns down from the current levels and breaks below the 20-day EMA. A break below $1.8271 will shift the advantage in favor of the bears. Therefore, the stops on long positions can be kept at $1.75. If the price sustains above $2.40, the stops can be trailed higher to $2.
LINK/USD
The bulls failed to clear the overhead resistance at $3.83 between April 18th and 20th. This resulted in a drop to $3.3729, which was bought by the bulls. Currently, the bulls are once again attempting to thrust Chainlink (LINK) above the overhead resistance at $3.83.
If they succeed, the LINK/USD pair is likely to pick up momentum and resume its upward move toward $4.9762. The bears might offer stiff resistance at $4.2023, but the likelihood of a break above it is high.
The first sign of weakness will be a break below the trendline and the 20-day EMA ($3.22). If the bears sink the pair below $2.9450, a deeper correction is possible.
👉 Explore more advanced trading strategies
Frequently Asked Questions
What does a 'decoupling' of crypto from traditional markets mean?
Decoupling refers to a scenario where the price movements of cryptocurrencies, like Bitcoin, begin to move independently of traditional financial markets, such as stocks or commodities. This is seen as a sign of maturity, showing that crypto is being evaluated on its own merits rather than just as a risky asset.
How does the Bitcoin halving potentially affect its price?
The halving is an event where the reward for mining new Bitcoin blocks is cut in half, reducing the rate at which new coins are created. Historically, this reduction in new supply, coupled with steady or increasing demand, has led to a bullish market in the months following the event.
What is a symmetrical triangle pattern in trading?
A symmetrical triangle is a technical analysis chart pattern characterized by two converging trendlines connecting a series of sequential peaks and troughs. It typically represents a period of consolidation before the price breaks out, with the direction of the breakout indicating the next likely trend.
Why are moving averages and the RSI important for analysis?
The 20-day Exponential Moving Average (EMA) helps identify the short-term trend direction and potential support/resistance levels. The Relative Strength Index (RSI) is a momentum oscillator that measures the speed and change of price movements, helping to identify overbought or oversold conditions.
What is a stop-loss and why is it used?
A stop-loss is a predetermined price level at which a trader will exit a position to limit their potential loss on a trade. It is a crucial risk management tool, especially in the volatile cryptocurrency market, as it helps protect capital from significant downturns.
What invalidates a bearish head and shoulders pattern?
A bearish head and shoulders pattern is invalidated if the price, instead of breaking below the neckline support, reverses direction and breaks above the pattern's right shoulder or, more convincingly, above the pattern's head. This indicates that buying pressure has overwhelmed the selling pressure.