- Bitcoin prices may slide below $5,000
- To protect investors, an Indian government official suggests banning of cryptocurrencies
An Indian official believes cryptos including Bitcoin are Ponzi schemes that the country’s regulator should ban. That is despite the acceptance in Japan and other governments taxing the asset like any other commodity. Even so, Bitcoin (BTC) is under pressure and risk dropping below $5,000.
Bitcoin Price Analysis
Fundamentals
Well, after last week’s debate about BitFinex, USDT and the NY OAG suing iFinex, exchanges are yet to recover. There is a premium of around $300, and after a steady recovery last week, it looks like Bitcoin prices will slide in days ahead.
Not only is Bitcoin (BTC) down 1.6 percent in the previous week, but altcoins like BCH are slipping, with BCH dropping 16.7 percent in the same time frame. Often, Altcoins are leading indicators. Since they have a direct correlation with BTC, prices tend to bust when the former is about to dip and explode hours or days before BTC surge higher.
Even so, our stance on Bitcoin is bullish. Banking on the contrarian effect around India discussion of cryptocurrency trading and whether they should ban the digital assets is a big plus for Bitcoin which is technically in an uptrend.
One Indian government official is adamant that cryptos should be outlawed and was quoted saying crypto is a Ponzi scheme and to protect investors, the country’s regulator should ban the trading of all digital assets.
“When it comes to investor protection, the IEPFA has to take a stand against certain things. Against Ponzi schemes, we are taking a stand. We think that cryptocurrency is a Ponzi scheme and it should be banned.”
Candlestick Arrangement
Nonetheless, thanks to supportive technical candlestick arrangement and shifting sentiment around Bitcoin, our stance is bullish. Like BCH, there is a correction of BTC prices after the overpricing of Bitcoin (BTC) after the close of the week ending Apr-16. Still, visible from the weekly chart, BTC is trading above a multi-month resistance trend line.
From historical price movements, it is likely that prices will consolidate and even retest the main support trend line and $4,500 in a typical retest before bulls flow back, thrusting prices above $5,800 and $6,000.
On the worst-case scenario, our bullish outlook will be null if prices slide below Apr-2 lows, closing below $4,500 complete with high transactional volumes as bears of Q4 2018 flow back driving prices back to $3,200 in a trend continuation phase. On the flip side, gains above $5,500 will cement buyers of Apr-2 and BTC would likely rally towards $6,000.
Technical Indicators
Our anchor bar as it is Apr-2 bull bar. Despite drawdown, prices are stable, ranging and trading above $5,000. In light of today’s events, our anchor bar is Apr-25 with 21k. Supports stand at last week’s lows of $5,100. Therefore, for our bulls to be in charge, prices must be above spot levels because any drop below $5,100 with high volumes exceeding averages of 12k and 21k could trigger a sell-off towards $4,500.
Chart courtesy of Trading View