Technical analysis

Will the Bitcoin price drop after the halving?

Julien Moretto – 13 May 2020

It’s done! The Bitcoin halving took place on Monday evening, May 11, with no particular effect on the chart right after. Two days earlier, Bitcoin was trading at $10,000, before dropping sharply to around $8,000. Following this event, the price moved sideways, trading around €8,300 ($9000) on May 13 and almost stable over a week. The market seems to be looking for its next direction. Even if the bullish momentum is weakened, the interest on Bitcoin futures, especially those of the CME (Chicago Mercantile Exchange) is not weakening and is even increasing, suggesting that the upward trend could continue.

But the focus for the next few days will be on the computing power of the Bitcoin network. With the Bitcoin miners’ reward being halved, a number of them could capitulate. A phenomenon that could be reflected in a drop of the price. At the same time, the correlation with the equity markets remains strong, while the equity markets are also on a key technical level that will determine whether the price rise continues or whether we start an additional bearish leg. Analysis.

  • According to CoinGecko, market capitalization is down from $253 billion seven days ago to $246 this week.
  • Bitcoin dominance is rising at 66,3% (65,5% last week)
  • Ox (ZRX) offers an impressive performance of 75% this week.
  • On May 11, the open interest on the CME Bitcoin futures contracts was $389 million. A record

We invite you to discover our video (in french dated from May 12) :

Bitcoin (BTC)

Coinhouse recommendation: 
Wait

  • Last week, we advised to take partial profits on the €9,200 ($10,000) price zone. The sharp 18% drop in the price on the night of May 10 reinforces this strategy. The current support, between €7,400 and €7,600€ ($7,900 and $8,200) has stopped the fall for the moment. This zone also corresponds to the median of the bollinger bands in the daily timeframe.
  • A bounce has been underway for 3 days, but it could only be technical. If the price successfully crosses the €8,600 ($9,300), then the odds for the rise to continue will be high, and it will be possible to enter the buy again. On the other hand, a sustained return below €7,600 ($8,200) will confirm a more sustained downtrend and more sales will be expected. In such a scenario, the price could fall further sharply and eventually move towards the major support of €6,000 to €6,200 ($6,500 to $6800).

Ethereum (ETH)

Coinhouse recommendation: 
Buy on support

  • Profits were taken from Ethereum last week when it was in the €200 ($220) zone. Ethereum appreciated much less than Bitcoin last week, but still suffered a drop of the same magnitude as Bitcoin last weekend. As a result, Ethereum is down 7.5% over the week, with a price around €175 ($190) on May 13.
  • The €165 to €170 ($180 to $190) support is currently being tested, and purchases can be tried on this level. But beware, Ethereum’s price action will most likely depend on Bitcoin’s one. If the rise continues, the €200 ($220) resistance should break
  • Conversely, if the decline continues, the current support will breakdown. The MACD Momentum Indicator is currently in a bearish phase on the daily timeframe and calls for caution. The next support level to look for buying will be the chartist level of €140 ($160).

Chainlink (LINK)

Coinhouse recommendation : 
Hold

  • Chainlink (LINK) is stable over the : +0,3% , at €3,40 $(3,70) on May 13.
  • Context reminder: in the long term, Chainlink evolves in a wide range between the €1.40 support and the €4.25 resistance ($1.50 and $4.60). For all those who have been able to buy Chainlink near the support, you should continue to holdit for the time being. The course has appreciated well but has been moving sideways for the last 2 weeks around 3.40€ (3.70$). This is a consolidation phase. The direction of the price after this consolidation phase will depend very much on the overall trend in Bitcoin and in the market.
  • In case of a bullish exit, the odds will be high that the €4.25 ($4.60) resistance will be broken. Its break will be a buy signal and will propel Chainlink’s price to new highs. Conversely, if we see a bearish exit, the price range between €2.25 and €2.45 ($2.55 and $2.80) will be a good time to buy.

Top & flops of the week (top 50 marketcap)


Tops

1- 0x (ZRX) : +80%
2- Augur (REP) : +18,6%
3- NEO : +10%


Flops

1- Ethereum Classic (ETC) : -15%
2- EOS : -11,6%
3- Bitcoin SV (BSV) : -9,5%

L’essentiel de l’actu crypto

  • The Libra association now has a CEO
    This is HSBC’s legal manager Stuart Lev
    A strong message from the Libra association to the regulators, which shows that the project wants to work with them and not to pass “in force”.
  • Paul Tudor Jones is the head of the hedge fund Tudor Investment Corporation
    7.8 billion dollars under management for the fund, the 343rd largest asset in the world
    He has announced that he has positioned himself at just over 1% of his fortune in Bitcoins
    “The truth is, I’m not a hard currency nut or a crypto nut. I’m not a millennial who invests in cryptomoney, which is very popular in this generation, but a baby boomer who wants to seize the opportunity that presents itself while protecting his capital in ever-changing environments. »
  • Telegram decides to reimburse all US investors
    Two choices are offered
    To be repaid now at 72% of their investment, or to convert their investment into loans and see their money back at 110% in April 2021
    This follows discussions with the relevant authorities and their lawyers.

Some figures:

Investors’ attention is drawn to the fact that the content of the articles does not constitute investment advice.
Investment in cryptoactives carries a risk of total capital loss.
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