Bitcoin’s $50K Tug-of-War and the Double Bottom Springboard

May 14, 2021

Bitcoin's $50K Jerk-of-Warfare and the Ambiguous Bottom Point of departure

by Bog& Giulvezan

Since Wednesday's big drop, Bitcoin has been hugging the $50,000 even out in what looks like a tug of war between the bulls and bears. It is presently trading at $49,950, afterward rebounding from $45,700 lows.

The initial drop was mainly caused past the "breakup" 'tween Tesla and Bitcoin, when the past decided to halt the use of the latter equally payment for its electric vehicles, delinquent to state of affairs concerns. Elon Musk tweeted "We are afraid around rapidly maximising use of fossil fuels for Bitcoin excavation and transactions, especially coal, which has the worst emissions of any fuel". He continued by adding that "cryptocurrency is a good idea along many levels and we believe it has a likely future but this cannot come at great cost to the environment". That's almost incongruous, considering how much fire his SpaceX programme burns on every flight psychometric test, but let's not go there.

Adding to the weakness was a regulative interrogation launched by U.S. authorities into the crypto large Binance. Thursday, Bloomberg reported that the U.S. Internal Revenue Service and the Justice Department are gathering information or so Binance's commercial enterprise and regulatory compliance.

As usual, when Bitcoin is under bearish pressure, the rest of the crypto market follows and that's precisely the case immediately. Ethereum is trading at $3,870, convalescent from session lows in the $3,500 sphere, Binance's BNB is trading at $595 aft visiting lows in the $510 area and even DOGE lost around 16% o'er the last 7 days, right away trading at $0.52.

Chart Analysis – BTC/USD

During the last 7 days, Bitcoin slipped 11% lower and is today trading right on the $50,000 mark, with the MACD and the Relative Strength Indicator headed south. Despite this weakness, IT's important to note that the pair has recovered from $45K lows and that the last closed daily candle shows a long taper in its lower side, which is a sign of rejection.

It is also worth mentioning that price created a double bottom blueprint on the $47,000 level and although IT's not a perfect double bottom of the inning, it is still a optimistic formation. If Bitcoin can reform support at $50,000, the chances of a climb to a higher place the 50 days Moving Average (blue line) will step-up. A beardown daily bullish candle closed in a higher place the mentioned floor would confirm the bounce, thus gap the doorway for higher prices.

Although the trend is still bullish from a thirster-term perspective, the pair formed a lower high and opposition at $59,000, which are bearish signs. Put differently, don't jump in and wait for a clearer picture.