The rally is divided into 2 phases and the price can create such a third wave. Below, we will look at two possible models and make predictions of future short-term movement.
The first model we will consider is the three-drive of trader A.C.X. He tweeted a Bitcoin chart and commented that “there is a three-drive model in progress” that will cost up to $ 7,648.
There’s a 3 drive pattern playing out.
3 drive target would be 7648 which aligns to the void fill. pic.twitter.com/UufTOTsaaE
– ◇ .A.C.X. ◇ (@ACXtrades) March 23, 2020
“A view of price increase.
There is a three-drive model going on.
The three-drive target will be $ 7,648, matching the fill space. ”
The three-drive model starts from the low of $ 3,850 achieved on March 13. If true, the price has completed a second correction and is in the process of starting to create a third momentum.
The $ 7,600 target is found at Fib 1,278 for the entire model. In addition, if the third-drive is identical in length to the correction of the second increase, the price will reach an exact high of nearly $ 7,600. The next one is then expected to be a downward move.
Bitcoin chart | Source: Trading View
The second model is the ascending wedge pointed out by Crypto Michaël. He outlined the increasing wedge discount model that BTC is currently trading in and emphasizes the importance of the resistance zone of $ 6,800-6,950, which could trigger a quick upward move if the price breaksout.
Bouncing alongside the equity markets here and tapping the highs.
Crucial area to break is still $ 6,800-6,950 zone. Breaking that & concell be targeting $ 7,800 next.
– Crypto Michaël (@CryptoMichNL) March 24, 2020
“Rise with the stock market and exploit high levels.
The key area to break down is still $ 6,800-6,950. If successful, I target the next $ 7,800. ”
If the price is actually trading inside the wedge, the support line has been confirmed 4 times, while the resistance line can still be steeper since it has only been touched twice. But, the current resistance line is near $ 7,400 and can rise to $ 7,600, depending on when the price touched it.
Therefore, it is possible that prices are implementing both of these models: completing a three-drive model and increasing intra-wedge transactions. As the increasing wedge is the discount model and the BTC adjusts according to the three-drive model, the discount move will be expected later.
Bitcoin chart | Source: Trading View
In short, Bitcoin prices have risen sharply since reaching a low on March 13. Prices are expected to continue as such until reaching a high of nearly $ 7,600 before falling and possibly breaking the current trading pattern.
However, there is still reason to expect BTC to increase in price.
Separated from the traditional market
On-chain analyst Willy Woo charted the correlation between Bitcoin and traditional markets and identified a 'trend split event'. He added that prices do not fall V-shaped but will accumulate long before recovering.
The next key event is confirmation of BTC decoupling from traditional markets. Here’s a bunch of charts, many are bullish. I will note that I don't expect a V-shaped bottom, I think there will be time, an accumulation range before moving up.
– Willy Woo (@woonomic) March 19, 2020
“The next important event confirms BTC separates from the traditional market. Here is a series of charts showing the possibility of price increases. I didn't expect a V-shaped bottom, I thought it would take time, accumulating the range before moving up. ”
The first chart shows that both gold and BTC are moving away from the S&P 500. Since peaking in early March, gold has fallen 12% to its 3-month low, proving that there was no safe haven during the crisis.
Silver is even worse, dumping nearly 38% in the month because the market has no demand. Market stock fell more than 30% in less than a month and oil prices plummeted 57% over the same period.
According to analysts, gold and Bitcoin may be entering the accumulation period. The next chart shows the Bitcoin mining energy ratio has surged again with a lot of energy being pumped into the network, which is a positive sign.
The power of the Bitcoin network
The difficulty range expanded after a period of compression also proves a strong network while Bitcoin's exchange rate (investors' on-chain net position) is recovering.
However, the recovery period is still very short and the impact of the Corona virus will probably last for the rest of this year.
With the gloomy labor market and businesses closing, there will be less capital to invest in high-risk assets like Bitcoin. However, institutions can still accumulate and this promotes resilience after halving.
The central bank's massive fiscal stimulus around the world is also the driving force of price increases for finite assets like Bitcoin as fiat prices depreciate further. Printing more money has never been a viable solution to economic disasters caused by the ‘monumental’ debt bubble.
Bitcoin may drop more in the short term, but things still look good in the long run.
You can see the price of Bitcoin here.
Disclaimer: This is not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
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