The first quarter of 2020 is over and in the first week of the second quarter of 2020 the crypto asset market is starting to show its passion. However, will this bullish momentum last long? Can Bitcoin become US $ 9 thousand?
We can see that the price trend of Bitcoin shows a significant increase from US $ 6 thousand to US $ 6,900 on Sunday, April 5, 2020 and is still trying to break the resistance at US $ 7 thousand.
Will in the second week of April we see an increase that can get us back to prices at the beginning of the year? Or we will return to prices in early March?
Approaching Golden Pocket
If pulled from the peak price in mid-February, when the price of Bitcoin is still above US $ 10 thousand, we can see that prices experience a retracement or a temporary reversal and are approaching the “golden pocket” area at the Fibonacci level.
Golden pocket is an area between 0.5 and 0.618 which is widely used by traders as a sure point whether a trend will continue or reverse. The Golden Pocket Area is between US $ 7,130-7,900.
Bitcoin price action around this area will determine its fate. This golden pocket now acts as resistance.
If Bitcoin fails to penetrate this area, we can anticipate a decline to at least its lowest point in March (around US $ 3,800).
However, if Bitcoin manages to penetrate this area, or at least can survive in it, then we can expect prices to return to the zone of US $ 8,000 or more.
The bearish bias is still strong
However, what is worrying is the price pattern which is still showing bearish signs. We can see that the upward trend formed since the end of March was just a rising wedge pattern on a larger scale.
Rising wedges are patterns that show a retracement or a temporary reversal of a downtrend.
If this pattern is fulfilled, and the price of Bitcoin breaks through the pattern drawn, then the price of Bitcoin can fall into the zone of US $ 3,900.
Anticipate Peak Volatility in the Second Week of April
In the second week of April, there will be 2 significant events, namely Halving Bitcoin Cash and Bitcoin Satoshi’s Vision. The two crypto assets which are the result of forking from Bitcoin will experience their halving for the first time.
Although there is no historical data on how the price moves before and after halving, we can prepare price volatility: between prices will rise far, or fall far from here.
This might affect the second halving price for the crypto assets, which could affect market sentiment, especially since Bitcoin will experience Halving in the following month (May).
For traders or investors, the price action of these two assets can be used as lessons and references to anticipate how Bitcoin will be when Halving next month.