Price Prediction for Bitcoin and Other Cryptocurrencies
Price Prediction for Bitcoin and Other Cryptocurrencies

Bitcoin Prices Climbed $40,000 After Crypto Markets Bounce Back

The Bitcoin (BTC) price dropped sharply after China started a crackdown of companies that offer the service. However, the prices of Bitcoin, ether and other cryptocurrencies found some respite Thursday, following a selloff.

The drastic drop in Cryptocurrencies began last week when Tesla announced it would not accept the digital currency as payment for cars, a reversal from an earlier announcement.

Bitcoin recovered more than 4% to $40,077.40 on Thursday (May 20). Bitcoin had dropped more than 11% by 5 p.m. ET on Wednesday, after earlier plunging almost 30%. Dogecoin also rose 14.5% Thursday after dropping 27% the previous day, while ether was up almost 9% after falling 26%..

Several analysts weighed in on this retracement, as well as how it set bitcoin up for a natural price recovery.

This is happening after some key instititions announced that they would stick with their BTC holdings. Cathie Wood of Ark Invest said that she expected its price to jump to $500,000 in the long term. Similarly, Elon Musk said that Tesla will keep its holdings. The same is true with Michael Saylor, who said that he expects to keep his Bitcoins.

BTC is also rising after minutes by the Fed showed that the members have started discussing tightening. While this is a bearish thing for BTC prices, analysts believe that it could push prices higher since tightening has now been priced in.

Latest Price Prediction for Bitcoin and Other Cryptocurrencies

Resistance level of $46,000 or $47,000

In the coming weeks, bitcoin will probably fluctuate largely between $40,000 and $50,000, Vinny Lingham, cofounder & CEO of Civic, stated in a tweet.

“A month or two at these levels will be healthy,” said Lingham.

He predicted that in short-term, declines below the $40,000 level would provoke strong support, whereas “premature moves” above $50,000 were “likely to be rejected.”

The four-hour chart shows that the BTC price has jumped from yesterday’s low of $29,977 to almost $40,000. On the four-hour chart, the price is below the 50-day moving average. It is also below the important resistance level of $47,000, which was the lowest level on April 25.

Therefore, at this point, it is a bit difficult to predict whether the Bitcoin price will last. For it to happen, bulls will need to push it above the 25-day moving average at $42,500 and the 50-day EMA at $45,000. However, a drop below yesterday’s low of $29,977 will signal that there are still sellers in the market. This will open the possibility of the price falling to $25,000.

With Bitcoin price still well below expectations, however, analysts are keenly eyeing possible resistance levels — as well as support — should a fresh dip take hold of the market.

Fed to consider 'possibility of issuing' central bank digital currency

The Federal Reserve is moving forward in its efforts to develop its own digital currency, announcing Thursday it will release a research paper this summer that explores the move further.

Though the central bank did not set any specific plans on the currency, Chairman Jerome Powell cited the progress of payments technology and said the Fed has been “carefully monitoring and adapting” to those innovations.

Fed officials have emphasized the importance of getting the issuance of a central bank digital currency right rather than participating in a race with its global peers.

However, the moves of multiple countries, most prominently China, in the central bank digital currency (CBDC) space has intensified talk about how aggressively the Fed should move. China’s progress has stirred worries that it could undermine the dollar’s position as the global reserve currency.

Latest Prediction for Prices of Bitcoin and Other Cryptocurrencies

Now, attention is turning to two price levels in particular, with these marking a likely floor and ceiling, respectively.

First is $46,000, around $6,000 or 15% above spot price. As noted by on-chain monitoring resource Whalemap, this former support level is apt to act as resistance should Bitcoin see a further impulse move on short timeframes.

$46,000 is also where the significant 20-week weighted moving average (WMA) currently lies. Traditionally, during bull runs, weekly candles stay above the rising 20WMA, and a violation of the trend could yet be a bad omen.

“In terms of TA, 33k looks like a support,” Whalemap explained alongside charts.

“A very similar set up can be observed at 46k which is shown below. Previous support at 46 should also be resistance if we bounce from 33.”
BTC/USD support and resistance areas of interest. Source: Whalemap/Twitter

While those comments were made before the capitulatory move to $30,000, the appetite for selling remains closer to $50,000 and beyond.

The $19,000 vacuum

On the flipside, Whalemap warns, a comparative lack of buyer support below Wednesday’s lows could potentially open up a path to a further capitulation run as low as $19,000.

“We need to hold 29k,” the Whalemap team told Cointelegraph, “Otherwise there is a large gap in supports up until 19k. This means buying 29k-->33k prices is a great risk/reward trade.”

“If you buy something because price went up, you will sell as soon as price stops going up or goes down... If you buy something because you believed current price was below fair value or future growth would increase value, when price falls you will buy more...,” Mark Yusko, founder, CEO and chief investment officer of Morgan Creek Capital Management, told Twitter followers overnight.

The volume of stablecoins flowing into exchanges stands as testimony to the level of interest in acquiring cryptocurrency at the $30,000 price point. According to data from CryptoQuant, this has reached a new all-time high.

Stablecoin inflows to exchanges. Source: CryptoQuant

This week’s crypto crash has helped erase almost 40% from bitcoin’s price from a peak of almost $65,000 in mid-April. Some are worried that the worst is far from over. The rapid drop has forced many investors to unwind bets made with borrowed money, adding to the pressure on prices for a swath of cryptocurrencies.
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