During a bear market, fear grips the investors, resulting in a long liquidation. While some believe that the bubble in Bitcoin has burst, others believe that the current fall is only a correction, which will lead to higher prices later in the year.
Founder and chairman of investment firm LDJ Capital, David Drake believes that Bitcoin will rally to $30,000 by the year-end. That is a whopping 262 percent return from the current levels.
Jack Dorsey, the CEO of Twitter and Square, believes that Bitcoin can replace the fiat currencies within a decade.
A few positive voices in a sea of gloom is a welcome change. Let’s see if the short-term picture is improving or not.
Though Bitcoin broke out of the descending channel on March 20, it could not cross above the 20-day EMA. Currently, prices are again threatening to dip back into the channel, which is a bearish development. Our long positions initiated at $8,800 are trading under a loss. As the setup looks negative, we suggest booking a loss on 50 percent of the open positions and holding the rest with the stops at $7,600.
The next support on the downside is the March 18 lows of $7,715, below which, a retest of the February 06 lows of $6,075.04 is possible.
Our bearish view on the BTC/USD pair will be invalidated if prices breakout and sustain above the 50-day SMA.