Bitcoin is likely to reach a new historic record before undergoing a bearish correction, according to market analyst Vince Prince.
The crypto market analyst said on Monday that the BTC / USD exchange rate could rise to $ 67,000 in the next few sessions. He noted that the pair has shown an upward trend within a range of Ascending Wedge, a bearish reversal pattern. In doing so, BTC / USD tested Cunha’s upper trend line as resistance and its lower trend line as support on more than two occasions.
Bitcoin at $ 67,000?
The latest Bitcoin recovery from Cunha’s support, dubbed ‘D’ in the chart below, started on February 28. Mr. Prince anticipated that the retraction would complete a wave cycle after reaching the resistance level of the Wedge. And so it looks like, the next setback junction, a successive ‘E’ – a ‘resistance cluster’ – is located close to $ 67,000.
“Taking all of these factors into account, Bitcoin […] probably complete the wave count [enquanto] entering the strong upper resistance cluster, ”said Mr. Prince.
The statements came when Bitcoin threatened to break the bearish trend in the Ascending Wedge pattern.
The cryptocurrency on Tuesday was already trading near the bottom trendline of the structure, anticipating a break below it to reach lower levels. However, Prince remained convinced of a recovery move to $ 67,000, after which the price would fall towards the same support trend line, this time to really suffer a bearish collapse.
The Ascending Wedge warns of potential bearish reversals. Typically, a break below the standard’s lower trend line brings the price as low as the maximum height of the wedge. Therefore, depending on the level of Bitcoin’s breakdown, it would risk falling by at least $ 12,000.
Market catalysts support a bullish trend for Bitcoin. Last week, US President Joe Biden sanctioned his $ 1.9 trillion coronavirus stimulus package after obtaining approval from Congress and the Senate. In doing so, the Democratic leader allowed Americans to receive direct payments of up to $ 1,400.
While many of the beneficiaries would use the aid to manage their families, some analysts believe that a good portion of Americans would also use payments – or at least part of them – to invest in stocks and the bitcoin market. Billionaire investor Mike Novogratz is one of them.
“Many of the stimulus checks go to young people who want to buy bitcoin”, said him to CNBC earlier this week.
On the other hand, Federal Reserve officials will meet to discuss their future policies on Tuesday and Wednesday. The market believes that President Jay Powell would leave his existing monetary policies unchanged, based on his recent comments. Bitcoin can maintain its upward momentum if it does.
Meanwhile, headwinds for the cryptocurrency come from any potential guidance on rate hikes. Markets have already priced an earlier interest rate hike, pushing the yield on the 10-year US Treasury bill up 60 basis points since the last Fed meeting. The central bank can validate those expectations.
As a result, Bitcoin could suffer an early collapse from Wedge, risking a decline of around $ 12,000.