Bitcoin: a purge that represents a long-term opportunity

Credit: Pixabay – Eivind Pedersen

The course of Bitcoin (BTC) collapsed more than $ 4,000 yesterday, with all asset classes in the financial markets. Institutionals were everywhere in search of liquidity.

Key technical factors of the article:

• The bitcoin price lost over $ 4,000 yesterday, coming back to the “start box” of the 2019 bull market. purge which represents a long-term opportunity.
• After the market fell yesterday, the BTC course is technical rebound from the $ 4,200, the upward technical break point on April 2.

The financial markets have been facing the bursting of a general speculative bubble for 3 weeks, the trigger of which was Coronavirus Covid-19.

After the deflated Internet bubble in 2002/2003, after the 2008 financial crisis, it is now the margin debt bubble that is purging (margin debt or leverage on stratospheric levels).

Inflation of financial assets was unrelated to the macroeconomic reality, the backlash hurts but this purge is evil for good because it will create conditions (a little more patience) for future bullish trends of the decade 2020. Yesterday the price of the CAC 40 lost 12%, its worst session since its creation in 1987. Besides, all the assets suffered capital outflows (stocks, ounce of gold, oil, cryptos, credit …) With one goal for the pros, to regain their liquidity.

Bitcoin price – tradingview

The bitcoin price did not escape the rule and the overall open position fell, capital left temporarily to fill the liquidity gaps in risky financial assets. The fall of BTC yesterday has nothing to do with a disinterest vis-à-vis cryptocurrencies, but is rather linked to the panic who crossed the great trading halls yesterday.

The Chicago Mercantile Exchange (the Chicago Stock Exchange) closes its premises from Monday to prevent its teams from being reached by Covid-19. However, discussions on future contracts will continue, particularly on BTC futures contracts. The partial and temporary closure of the CME is therefore not a reason for the fall.

Finally, remember (see my previous technical posts) that the institutional traders remained net seller throughout the rise between $ 6,500 and the extreme technical resistance of $ 10K / $ 10.3K. They still had their hands on the market in fine. We must now scrutinize each report to see if they return to purchase at current levels.

BTC / USD long term

You will find above a Bitcoin price long term chart, with a logarithmic scale. The long-term trend (since 2011) is upward and the fall does not call this into question.

In the immediate future, it is a technical rebound that started from the support at $ 4,200 (upward acceleration threshold of April 2, which reached $ 14K) towards the (new) resistance at $ 6,100 / 6,500 $.

I believe that this return on $ 4,000 / $ 5,000 is a opportunity to stand at long term. Invalidation below $ 3,000, the lowest of 2018.

This purge upstream of the Halving is a good omen, only stakeholders and BTC miners the strongest face it. We are starting on healthy foundations.

Follow Vincent Ganne on Trading View for further analysis on the financial markets. The technical thresholds and the trend indicated above are based on the technical approach "price, momentum, sentiment, ichimoku". The data come from Bitstamp and the graphics of TradingView. You can consult the history of our technical points on cryptocurrencies in click here.

This content is provided for informational purposes only and does not constitute an investment recommendation. We remind you that theinvestment in crypto assets, including Bitcoin, is extremely risky. Cryptocurrency prices are prone to large and unpredictable price swings