Bitcoin has had somewhat of a rocky road to recovery after its tramandous 2000% increase a year ago and than during the New Years correction, an event most Bitcoin traders see coming, it had lost almost half its value. Nevertheless after major rises, one has to expect and be prepared for major long term correction phases, but it is now beginning to muster new strength and the bulls are coming out of the shadows once again for another momentous rally. Despite it reaching the $6700 mark in April 5th, it has now managed to reach the $9600 mark on May the 6th, a 30% increase within the space of a month.
Bitcoin and blockchain technology as a whole is facing a whole new wave of good news, giving the fundamentals side of blockchain a boost. Particularly within the Middle Eastern markets where blockchain is seeing somewhat of a revolution, despite the Middle East not being a large market, it is beginning to pick up at a rapid pace with Arab money getting behind the blockchain revolution in an area of the world where the West and East meet for business, it is increasingly important to adopt blockchain technology to facilitate such transaction on a global basis that are fast, secure, cheap and free of any local economic issues and uncertainties.
In addition to this, we are beginning to see a whole new wave of cryptocurrencies known as “stable coins” that are backed by asset. This in turn makes them more promising currencies as they do not have the same volatility traditional cryptocurrencies have which are used for both making transactions and for investment purposes, with the Bitcoin being King. With the Bitcoin being seen as a “digital gold” which can facilitate transactions but due to its ever growing difficulty in terms of being mined, there being a limited amount available and 80% of the Bitcoins that are available have already been mined, it is seen more increasingly as an investment asset that has provided returns that are unmatched by even gold itself.
Bitcoin’s technical analysis
It is not just the fundamentals that and innovation that are leading the charge, the technicals are also beginning to line up in the long term for another bullish run.
- EMA lines have crossed over signalling a bullish upside swing
- Low volatility is usually followed by a bullish upswing
- Currently looking at the $9100 level for support, if we see an upward swing and momentum, we could be looking at breaking the $10,000 resistance and onto $11,400
- If we see a rejection at $9100, we will see a double dip support at the $7900 level, look for bullish volume at that level
- SMII has broken bearish trend line
At this point in time, we would recommend the wait and see strategy, the likelihood is the $10,000 break will come from the $9200 level to the $7900 level in our opinions.
To conclude the Bitcoin appears to be coming out of its major correction and back into bullish territory with support above its lows of $6700 during April the 5th, we maybe looking at another bullish run in the short to mid term for the Bitcoin. One can expect such a bullish run to continue into the distant future as stablecoins make their mark on blockchain and Bitcoin, the original coin takes the role of becoming the digital gold.