Bitcoin Nears $4.2K, Can it Sustain Positive Momentum? | Crypto Markets

Bitcoin Nears $4.2K, Can it Sustain Positive Momentum? | Crypto Markets

We’ve been seeing a lot of momentum
in the crypto market lately. As we discussed it’s altseason at the moment. So Bitcoin is going up kind of gradually. Some of the altcoins are outperforming a bit. The key level to watch out for today is $4,200,
this white dotted line. If we zoom out on the charts though the $4,200
is not extremely significant on a historical perspective, as you can see during the
Bull Run it didn’t really play much. The key levels here are $3,000 on the bottom
and $5,000 on the top. So this $4,200 level only became significant
once we bounced. So there are the December lows over there. And then once we bounced it, we tested this $4,200,
so that’s the top of the current range at the moment. This yellow line is the long term bearish
trend line and it does seem like it’s actually broken at the moment which is quite significant. However, it’s not really the purest indicator
because some people will draw their bearish trend line like this, in which case we’ve
broken it a month ago, and some people will probably draw it like this, in which case
we haven’t broken it yet. So, if we ignore that, what we really want
to look for is this blue line. The blue line is the 200-day moving average. We discussed this in last week’s video and
the week before that, this is basically the one that we’re looking for. Right now the average price of Bitcoin
over the last 200 days is $4,623. So we still got a bit of ways to go, even
if we cross $4,200 today, that leaves us another $400 to get to the blue line. What I’d like to see in order for something
that could really change sentiment is a strong punch above that blue line and then that would
basically put a lot of people into a bullish stance. So definitely it’s still very much altseason
at the moment. On this chart we can see Bitcoin versus some
of the alts that have been outperforming, Dash has been the winner
over the weekend anyway. It just hit 100% gains since the December
lows, whereas Bitcoin is only down 30%. Also we can see here Litecoin and EOS which
have done 166% and 136% respectively. So, definitely we’re still in the midst of
altcoin season and some of the lower cap cryptos have been even doing better than that, some
of the really low cap cryptos are up 1000%, 2000% in a day, and a lot of the time they
kind of take turns surging as investors shift sentiment it’s very difficult of course to
pinpoint exactly which one is going to surge next. I mean Dash, overall, it’s a solid project. They have gaining acceptance, especially in
South America and in other places where crypto is needed most, they do a lot of
work on the ground there. But I don’t know that there was any specific
announcement that really caused it to zoom like that rather than just momentum building
slowly during the altcoin season. One of the key technical indicators that a
lot of chartists have been looking at lately is the Ichimoku Cloud. As you can see over the last month or so we’ve
been largely remaining above the Cloud on Bitcoin. So using most of those indicators that are
on the Ichimoku as a support level, which is quite a positive sign indeed. We’ve seen before that the FED is influencing
the macroeconomy and it’s basically because the central banks of the world, so the Federal
Reserve in the United States, the ECB, People’s Bank of China, the Bank of Japan etc. They’re the ones who are largely in control
of the money supply. So this basically feeds directly into how
much liquidity is around and how much money is available for people to invest. So just since the beginning of the year, the
FED have taken a very supportive stance and they’ve been kind of lowering their expectations
to raise interest rates. And you can see the effect it’s had on the
Dow Jones, even though we’ve been having a pretty good year for Bitcoin so far, the Dow
Jones is more than doubled that. And you can see that overall the correlations
between the stock market and between gold and Bitcoin have been
rising pretty steadily throughout the year. At the moment, I mean, the correlations are
pretty much insignificant. We’re talking about 0.1. You know when the correlation is 0.1 it really
means almost nothing, 1 is a perfect correlation, negative 1 is a perfect negative correlation,
so 0.1 really doesn’t mean much, but when you can see that the correlation between gold
and Bitcoin and the Dow Jones and Bitcoin is rising steadily and I think that’s what
we really want to look at is not that the absolute numbers, but the direction. Overall, the central banks are increasing
liquidity into the market and that means that investors are looking for a
place to put that liquidity. And I think that’s a lot what we’re seeing
in the stock markets and some of the commodities and, of course, in crypto as well. If we zoom out on this chart, again we have
the Dow Jones in purple and Bitcoin in blue, we can see that 2017 was actually a fantastic
year for both stocks and for cryptos and that’s largely due to the Federal Reserve influence
and central banks being very supportive. In 2018 they withdrew a lot of that support,
they announced that they’re going to be hiking rates and winding down their monetary policy. And you can see that 2018 was extremely volatile
both for Bitcoin and for the stock markets. In 2019 again they changed their tone and
they became more supportive. And you can see that the stock markets actually
reacted immediately to that. And that’s because stock traders understand
a lot better, they’re trading on the Federal Reserve. So when they see that there’s more liquidity
in the market they instantly go out and buy. However, it has been kind of stalling in the
last few weeks in the stock markets whereas the crypto is just now
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5 thoughts on “Bitcoin Nears $4.2K, Can it Sustain Positive Momentum? | Crypto Markets”

  • Cointelegraph says:

    0:00 Momentum vs Resistance in the Crypto Market
    2:03 Is It Still Altcoin Season?
    3:23 Ichimoku Cloud: An Important Indicator to Look Out For
    3:45 Dow Jones Performs Better Than Bitcoin
    4:44 Correlation Between Stocks and Bitcoin is Insignificant, but Rising
    5:37 Support From the FED in 2017 = Good for Stocks and Crypto
    6:12 Delayed Reaction to FED Decisions from Crypto Market

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