March 27, 2020 / Business

Bitcoin Price Forecast And The Possible Stock Market Reversal Scenarios

Bitcoin could rise to $ 8,500, and even up to $ 9,000 in the next week. Approximately such forecasts are given by traders Davincij15, Tone Vays and Crypto Zombie. What do we need for this, where are the resistance levels and an alternative bearish scenario, we will explain in this article.

Let’s start with the forecast of the trader Davincij15. He is extremely positive and he believes that the market can continue to grow and recover to the price of $ 8,500. However, BTC has to deep a little, for example, from current levels towards $ 6,000. Thus, we draw a double bottom in the form of the W and it will be a good sign for continued growth. Davincij15 also believes that if you do not trade, and go into bitcoin for the long term, then everything cheaper than $ 7,100 is a great opportunity to buy.

Another positive forecast made by Bitcoin-bear Tone Vays. According to the analysis, the weekly and daily charts look bullish. Right now, he, like Davincij15, is expecting a small correction, after which Bitcoin should break the resistance at $ 6,800. And if it succeeds, the road opens for a trip above $ 7,000. But you should not be strong optimists, because if we don’t take this level, the trend may unfold and an additional signal to danger is the formation of the “death cross”.

And the last guest today will be Crypto Zombie, who notes that Bitcoin has again burst out of the downstream channel. And further, on the CME futures chart, we can find a gap of $ 9,000 and even higher there is a gap of $ 11,000. Whether Bitcoin will go there depends on several factors, first you need to break the resistance along with the downtrend.

This is approximately the level of $ 6,800, which our previous guests spoke about. And the next resistance is in the region of $ 7,100, where there was an accumulation of positions in the fall and in December 2019, after which there was an increase. And the last ceiling before going to $ 9,000 will be the level of $ 7,800.

As for the negative scenario, in the event of an unsuccessful attempt to break the downward trend line, Bitcoin is waiting for a trip to $ 6,000 and, possibly, even to $ 5,500.

Stock Market

Let’s look at the gold market. The more dollars the US Federal Reserve prints, the higher the demand for a limited-issue asset:

gold market

Just stunning growth for gold and this is a great illustration of a V-shaped model of a market reversal. As we said, the US problems are not only a lack of dollars. Despite the situation when dollars are printed in unlimited quantities, and Congress, finally, approved $ 2 trillion in economic assistance, which includes benefits for citizens.

But this does not at all solve the problem of unemployment and the future general bankruptcy of companies, which will be the result of quarantine. And according to the World Health Organization, it is the United States that could now become the epicenter of the epidemic. So instead of a V-shaped scenario, markets can go along the so-called W-path:

w path

The logic here is the following: now we get the stock market growth by injecting freshly printed dollars into the economy, but then we return to falling after companies start issuing reports on lost profits, lay off staff and refuse to pay dividends.

There is a third option: it is called scenario L and implies a long and protracted way. However, the longer we do not see growth in the stock market, the stronger the stagnation in the economy and the recession spares no one:

l path

The scenarios mentioned above have the right to life, but now another point is much more important.

Market reversal patterns are time-tested, but we do not know their starting point. The risk that we are now seeing a dead cat rebound in the stock market and the real bottom is actually much lower – very large.

Indeed, the two previous crises showed a fall of more than 50%. And this time the markets fell by only 35% percent and we still have a lot to fall:

And here it’s like a double-edged sword. The central banks have never saved the economy so actively on the one hand, and the crisis has never coincided with international quarantine in history on the other. The question is which factor will win.

We can conclude, that now governments began to disperse the conspiracy theory that all this is a hoax and will soon be given to everyone a vaccine box that was made a year ago. Just someone wanted to redo the global financial markets, for which this brew was brewed. To be honest, we are not opposed to the whole story taking and abruptly ending. But conspiracy theories often remain only theories, having nothing to do with real life.


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