After an extraordinary display of outburst of momentum, BTCUSD seems to have stabilized around the $9,900 mark. At least for now. With roughly four days left for the Bitcoin halving, something like this was totally imminent, even if that superimposed with the world economy collapsing under the COVID-19 crisis.
The timing of Bitcoin’s spectacular rise proves the fact that investors are jumping into the BTC bandwagon out of FOMO, or the Fear-of-missing-out.
TA reveals the possibility of further correction of BTCUSD
Let’s take a look at the hourly chart for BTCUSD. Source: TradingView.com
The prices seem to consolidate around the $9.9k range. Even the Bollinger bands are shrinking, signaling the reduction in volatility in the short term.
Now, if BTC falls below the Exponential Moving Average or EMA, which is the central line in the Bollinger bands, further downward price action is possible.
Can Bitcoin be used as a hedging instrument?
If we take a longer-term perspective on Bitcoin, it might be at the nascent stages of a much bigger bull-run. Some billionaire investors claim that they would stock up Bitcoin for hedging against inflation in the long term.
To put things into perspective, let’s take a look at the weekly chart for BTCUSD. The weekly timeframe shows Bitcoin in a steady uptrend. It is in this trend despite the implications of the Coronavirus in the Financial markets.
One important observation, however, is concerning the Bollinger bands. BTCUSD seems to be clinging to the upper band. It could stay there for a while and move upwards. Or BTCUSD could come down drastically. If that happens, the timeframe signals, that such an event might occur after the BTC halving taking place on May 12.
