Bitcoin has shown strong resilience in market dynamics for the previous quarter when compared to the records of other market instruments. The equity markets had an abysmal performance like it had not experienced in past quarters, according to Dow Jones Industrial Average. This shows that bitcoin has grown to a stage of acceptance, and people are beginning to invest in the asset for long term returns.
As we start a new quarter, it is necessary to note that the Bitcoin halving event is getting closer. This event is significant in bitcoin pricing, as records show from the previous halving event that the price of bitcoin usually increases after Halving, because of the adjustment in the difficulty level of mining bitcoins. However, analysts are divided this time on whether the halving event will still impact the price of bitcoin this time, given the current economic condition that has been brought by the coronavirus pandemic. Despite these things, we still believe in a positive outcome for bitcoin in this second quarter, as previous records do show increased participation in the cryptocurrency markets in the second quarter of the year.
Another reason to expect better performance in this second quarter is that, compared to previous market disruptions, investors used the market crash as an opportunity to accumulate more coins, instead of liquidating their position. According to Coinbase reports, there was a significant increase in trading activity during and after the March 12 market crash, with Bitcoin recording an increased activity six times the usual trading volume.
Considering the behavior of buyers in taking in the dips, should we be confident of sustained interest at higher price levels? Let us examine the charts to know more.
BTC/USD
The bears are preventing Bitcoin (BTC) from sustaining on top the 20-day exponential moving average. This behavior is not a good sign. The weighted and exponential moving averages are on a decent, and the relative strength index is in the negative zone, which implies that bears are in control.
![BTC--USD daily chart]()
If the pair goes downwards to the extent of reaching the support at $5,660.47, it may retest the long term support of $5,000. Therefore, the stop-loss on the long positions can be maintained at $5,600.
However, if the BTC/USD pair bounces off the support at $5,660.47, then a possible move by the bulls will move the pair to the critical resistance at $7,000. Advancement at this level will be a good signal that may result in a rally to $9,000. Though the 50-day simple moving average at $7,837 might act as a resistance, we expect it to be crossed.
ETH/USD
Ether (ETH) has formed a descending triangle pattern, which will complete on a breakdown and close (UTC) below $117.09. This setup has a target objective of $81.78, but we anticipate the bulls to defend the critical support at $84.25 aggressively.
![ETH--USD daily chart]()
On the other hand, if the bulls can move the price above the 20-day EMA, the overhead resistance at $155.612 will be retested.
A breakout of $155.612 is possible, which will start a new uptrend that can carry the pair to the 50-day SMA at $194 and above it to $250. Therefore, traders can initiate long positions, as suggested in our earlier analysis.
Note: This post is culled from an original article by cointelegraph
