Bitcoin: USD/BTC (BTC=X) Enters Historically Strong Quarter With 3% Price Gain

Bitcoin: USD/BTC (BTC=X) Enters Historically Strong Quarter With 3% Price Gain

Bitcoin (BTC) kicked off the historically strong second quarter on a positive note, scoring gains overnight despite further losses on Wall Street.  

The top cryptocurrency by market value rose 3.5 percent from $6,420 to $6,650, having closed Q1 2020 with a 10 percent loss, according to CoinDesk’s Bitcoin Price Index.

The cryptocurrency remained bid even as the U.S. equities began Q2 on a weak note with the S&P 500 falling 4 percent. Investors shunned risk as President Trump’s stark warning on the coronavirus pandemic raised the specter of a prolonged shutdown and deeper economic recession.

Bitcoin printing gains amid the risk-off action in traditional markets is a welcome change for observers who believe the cryptocurrency is a haven asset like gold. The cryptocurrency largely tracked the S&P 500 in March as fears of a coronavirus-led recession triggered a global dash for cash.  

Bullish season

Historical data shows bitcoin has put in a positive performance in six out of the last eight years, as seen below.

Sellers had an upper hand in the second quarter of 2013 and 2018, but the losses were restricted to single digits. The 161 percent rally seen in the second quarter of 2019 is the third biggest quarterly gain on record.

Many analysts are of the opinion that the massive money-printing efforts recently announced by global governments and central banks amid the Covid-19 crisis could boost bitcoin’s appeal as an inflation hedge.

And, while it’s far from certain, the mining reward halving – the programmed-in 50 percent reduction in rewards for bitcoin miners due in May – may put upward pressure on prices. “A bitcoin emission cut of 50 percent is a fundamentally bullish even,” said Connor Abendschein, crypto research analyst at Digital Assets Data.

So bitcoin may repeat history by ending the April to June period in the green. Gains, however, may remain elusive if stock markets see another massive price sell-off, again triggering a liquidity crisis like we saw last month. In that case, investors will likely stay away from the crypto markets.

With the virus outbreak showing no signs of slowing down, the possibility of a deeper stock market crash shouldn’t be ruled out. “The impact of the coronavirus on economies will not be over quickly because there’s been a lot of damage. A gigantic amount of debt has been added and another stock market rout looks imminent,” said veteran investor Jim Rogers.

From a short-term perspective, the cryptocurrency appears on track to extend the recent rally from lows under $4,000.

Technical Indicators

Overall, the bias in prices is: Downwards.

Note: this chart shows extraordinary price action to the downside.

The projected upper bound is: 8,104.21.

The projected lower bound is: 5,362.32.

The projected closing price is: 6,733.26.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 18 white candles and 32 black candles for a net of 14 black candles.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 64.7319. This is not an overbought or oversold reading. The last signal was a buy 21 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 50.35. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 15 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 98. This is not a topping or bottoming area. The last signal was a sell 0 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 13 period(s) ago.

Rex Takasugi – TD Profile

FOREX BTC= closed up 61.310 at 6,800.860. Volume was 112% above average (neutral) and Bollinger Bands were 17% narrower than normal.

Open     High      Low     Close     Volume___
6,742.8706,877.7006,697.7806,800.860 745,792
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 6,505.16 7,740.33 8,178.86
Volatility: 83 132 83
Volume: 894,122 518,455 204,044

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

FOREX BTC= is currently 16.8% below its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. Our volume indicators reflect moderate flows of volume into BTC= (mildly bullish). Our trend forecasting oscillators are currently bullish on BTC= and have had this outlook for the last 1 periods.

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