[PRICE ANALYSIS] APRIL 15: BTC, ETH
There have been several statements by portfolio managers and investments analysts trying to connect the performance of bitcoin to equity market indices like the S&P 500. While people are studying the markets to see the correlation, the global financial markets are still being impacted by the effects of the present pandemic that has forced many businesses to reduce or shut down operations.
There are indications that a global recession is looming around the corner, something that could be potentially worst that the global market crisis experienced in 2008. According to the International monetary fund(IMF), this recession will continue for a series of years, even if the situation is contained by June this year.
To understand this picture, as bad as the 2008 recession looked, it only led to a drop of GDP by 0.1% in subsequent years, while the IMF is expecting a fall in GDP by 3% yearly, following the impact of this pandemic.
So how does this kind of forecast impact trading? As we know, a lot of day time trader is done based on the speculation of the traders, who adjust their portfolio of trading strategies based on their forecast of how that company will perform in the future. Therefore, it came as no surprise for the markets to react to such negative news by increased sell pressure, which drove prices downwards. A lot of investors were already expecting this situation, and most that were investing for the long term will be more focused on how the markets will recover after this period of crisis.
So what if there is a correlation now, between bitcoin and the equity markets based on the S&P 500 indices? It still won't mean that bitcoin's performance will always be linked to the equity market, as this is just a position for the short term. The way bitcoin has performed in the last quarter shows that the digital asset is already on its way to become a reliable instrument in the financial markets system, and fundamentals would drive its performance.
BTC/USD
The bears are still in control this time, as the pair is still performing under the 50 SMA. If this continues over the next few days, it could increase the selling pressure, and make the bears sink price to the current support of $6,553.21.
However, if the bulls step in to the arena, and scoop off this dip, then there could be enough momentum to move the price over the 50 day SMA of $7,033.
While we hope that the pair can take a more coordinated move over the next few days, traders can still sustain their long positions with a stop loss at $5,600.
ETH/USD
It seems like the ETH/USD pair has found a comfortable directory between the 50-day SMA and 20-EMA. While this may indicate a reduction in volatility, a spike can still occur within the next few days.
If the bears hijack the relative stability in prices, then selling pressure could drive prices to $135. So the recommended stop loss for long positions can be maintained at $135.
Conversely, if the bulls take control, then prices can move up to $176.103.
Note: This post is culled from an original article by Cointelegraph
