The most important test for Bitcoin price has arrived. At a point when the USD reversed course and strengthens across the FX dashboard, Bitcoin has the chance to diverge.
Since the COVID-19 pandemic started, the price of Bitcoin had an interesting path. Remember that this is one unregulated market, so when it correlates with a certain asset, the likelihood is that trading algorithms drive the price action.
The stock market meltdown in March sent the USD higher. Bitcoin fell off a cliff too – it dipped from $10,000 to below $4,000 in a few days. Then the USD liquidity improved.
As the stock market bounced back, the USD fell more and more. Bitcoin price rose back to the breakout point and then consolidated for a couple of months.
This is a point to make. While Bitcoin price consolidated below $10,000, the stock market continued to push higher. And the USD continued its slide.
Bitcoin price eventually broke higher but missed most of the price action seen in the stock market and the USD. Hence, this is its chance to diverge from the USD and keep a bullish bias. Considering that Bitcoin trading continues during the weekend, while the stock market and the traditional currency markets are closed, that is the window of opportunity for the Bitcoin price to continue its bullish trend.
Bitcoin Price Technical Analysis
While a very ugly pattern, the price action seen before and after the COVID-19 pandemic suggests an inverse head and shoulders pattern that broke higher. The neckline is not retested yet, but that is not a mandatory condition when interpreting and trading a head and shoulders.
Its measured move points to the $15,000 level, and a retest of the pattern’s neckline means Bitcoin price will retrace to $10,000. Bulls may want to remain on the long side until $15,000 comes, with a move to $10,000 invalidating the scenario.
Bitcoin Price Forecast