Bitcoin Monthly Forecast – April 2019
In my precious monthly forecast article, I had mentioned that price action in the month of March will be highly dependent on headlines to support price momentum. While that part more or less turned out to be true, investors reaction to headlines took on a different tone. While the events anticipated such as Russia converting their fiat forex reserves to Bitcoin and expectations for the debut of CBOE ETF & Bakkt platform failed to materialize in the market, investors hardly reacted to some of the key headlines which could have caused a bearish breakout price action. The technicals seemed to support positive price action as mentioned in the previous article with Bitcoin seeing strong gains overall for the month of March. Price action during the month of March 2019 seems to have been driven by speculative bets from retail traders and large scale investors alike.
Negative Headlines Failed To Create A Breakout
Positive investor sentiment back positive price rally influenced fresh wave of positive bets. This created a cycle of dead cat bounce attempts with significant corrective price action all of which saw bears being trumped in the end and bulls continued to gain a strong foothold. The price action from last month has created a picture which clearly suggests that Bitcoin has found the bottom in short to medium term and is now on a steady recovery rally. While a few key hurdles seem to have been scaled so far, many hurdles still remain ahead of long term target which needs to be breached for bulls to truly gain supremacy and for cryptocurrency market to truly gain the lost momentum which took Bitcoin and other major legacy cryptos to new all-time highs.
The Ethereum hard fork seems to have had a successful outcome and despite initial caution in the global market over the possible impact of network upgrade market activity turned out to have a positive outcome. Multiple tests were run and precautionary measures were taken to prevent issues, but in the end traders and market soon got used to network upgrade as this is not the first hard fork for Ethereum network resulting in market activity continuing like usual. As the bulls had successfully managed to weather the scenario and prevented history from repeating itself thereby managing to retain gains and positive momentum, bulls continued to aim for new heights across the month of March. As pointed out in my daily forecasts during the month of March, bulls seem to be growing in strength and increasing their foothold over territory on rebound post every single dead cat bounce scenarios.
This has helped Bitcoin gain a firm hold on support over not just $3000 & $3500 handles but also over $ 3800 & $3900 handles. Speculative trading led to a huge level of fund flow being cycles within the cryptocurrency market. In fact, traders who regularly followed volume data would have easily recognized that overall trade volume rose to new highs for the first time since the cryptocurrency market began declining in 2018. Reports which stated that debut of Bitcoin CBOE ETF & Bakkt platform’s approvals have been delayed to late March and could get delayed even further didn’t seem to have any impact on the market either. Over $2 billion USD was regularly circulating in and out of the market on every dead cat bounce scenario but trading volume has held steady even if it didn’t continue to grow post hitting new multi-month highs.
This is viewed as a clear sign from the fundamental perspective, that cryptocurrency market has finally found the bottom and is now steadily building up a recovery rally albeit slow progress in same. Meanwhile, news that Bitcoin mining hashrate rose for the first time since miners began closing shop on lack of profit to sustain activity was also viewed as a welcoming move which provided the market with fundamental support. Increased hashrate is a clear sign that mining activity is beginning to boom again. As all the weeds who wanted to ride the wave have washed out from the market, those who still remained in cryptocurrency market were either loyalists or investors with huge portfolio balance who knew how the cryptocurrency market worked and was willing to let a significant portion of thier funds stay put for prolonged time over prospects of seeing high gains.
Bitcoin At Critical Juncture As Bulls Test Critical Price Levels
The cryptocurrency market even saw Bitcoin and legacy crypto coins fail to make a bearish breakout on news that CBOE was closing its Bitcoin futures contract at end of March owing to increasing operational costs and lack of profit and trading volume. While this move could be a major blow to market as it could cost the mark quite a few billions if and when investors move their funds out of the market if the crypto assets managed to hold out attempts by bears to derail gains, Bitcoin and major legacy crypto coins will see market move up on next leg of the upside move. For the majority of the month, Bitcoin had managed to reclaim and trade above $4000 handle despite repeated attempts by bears to make a breakout. Towards the end of the month, Bitcoin even managed to climb above $4085 handle which proved a hurdle for quite a while now. Moving forward, the path with least resistance seems to be on the upside as bulls continue to exhibit firm hold over price momentum. The BTCUSD pair needs to breach $4100 handle followed by $4200 handle and establish a stable rally above the mentioned price levels for the pair to see an increase in fund flow and speculative bets that could push Bitcoin on next leg of upside rally with aims for $5000 handle. In the month ahead, Bitcoin needs to hold above $4000 handle for positive price action to continue while a decline below $4000 handle will lead to battle of attrition with bears that could result in Bitcoin falling back towards $3800 handle.
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