In simpler terms, investors in the crypto market are feeling anxious and apprehensive due to tensions between Israel and Iran. Bitcoin is responding to this fear by moving sideways and downwards. Yet, the developing chart pattern could indicate a strong bullish trend, known as a “bull flag.”
Fear pervades markets
Current times bring instability. The S&P 500 in conventional markets has dropped by 4.2%, while the Nasdaq 100 experiences a similar decrease. The general mood toward conventional markets is marked by apprehension.
In the world of cryptocurrencies, things aren’t looking great recently. Despite the Fear and Greed Index indicating “Greed,” bitcoin has dropped an additional 16% since April 8th. This decline came after a 17.5% drop in early March. Fortunately, there was a brief rally beforehand, allowing bitcoin to only fall back to its support level of $60,000.
Bull flag forming
An advantage of Bitcoin’s price fluctuations is that it forms a bull flag pattern in technical analysis. If Bitcoin maintains its support at around $63,000 (or even dips down to the lower $60,000s), this strengthens the foundation of the bull flag.
An additional point to consider is that the longer Bitcoin ($BTC) stays within the confines of the bull flag, the more significant could be its price surge once it chooses to break above this resistance. The potential target for such a move, based on the measurements of the bull flag, stands at around $96,000.
The bearish scenario
If the price of Bitcoin decreases and goes below the flag’s bottom, shattering all support levels beneath $59,000, then we can expect a significant correction towards $51,000. This scenario would result in approximately a 30% decrease in value if it plays out.
Traders and investors could be feeling uneasy at the moment. The inflow of funds into US Spot Bitcoin Exchange-Traded Funds (ETFs) has significantly decreased over the past week, while the redemption process from the Grayscale Bitcoin Trust ETF (GBTC) has caused more Bitcoin outflows than inflows.
Fortunes are won and lost in such times
Keeping a careful watch on potential conflicts and their impact, as well as the downturn in traditional stock markets, may mean further turbulence for bitcoin and the cryptocurrency market.
Yet, one may wonder if Israel is willing to take the risk of retaliating against Iran with another round of hostilities? The fiercest advocates for war should acknowledge that no party would emerge victorious if the situation deteriorated in such a volatile manner.
In other words, considering this perspective, it could be advantageous to purchase when the market sentiment is pessimistic and others are selling. Courage pays off in such situations, even if it seems risky or against the prevailing opinion. Wealth can be gained or lost during these periods.
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2024-04-17 15:02