Bitcoin (BTC/USD) Price Outlook:
Bitcoin Price Awaits Catalyst as Speculative Mania Heads Elsewhere
Bitcoin escaped the long weekend without a supremely volatile event as price maintained a relatively narrow price range despite the liquidity conditions. Holidays and unusual liquidity conditions have contributed to extreme volatility in the past and, given the recent struggles within the space, it could be argued Bitcoin bulls dodged a bullet with price trading roughly in line with where it entered the weekend. Going forward, however, Bitcoin may need to regain its shine before it can look to recapture lost ground as retail traders and the rampant speculation they bring about seems to have moved elsewhere.
AMC Entertainment (AMC) Price Chart: Daily Time Frame (January 2021 – June 2021)
To that end, AMC Entertainment (AMC) looks to be the recipient of said interest and can be viewed as the market’s speculative favorite for the time being as the stock endures considerable volatility and rockets higher. Despite few positive fundamental developments to drive such a move, the publicity and coverage that the stock is getting may capture the attention of some speculators that would have otherwise entered the cryptocurrency market.
While it is difficult to gauge the overlap of traders and the pool of capital is likely rather smaller in the bigger picture, it could work to keep Bitcoin out of the limelight at a time when price remains vulnerable.
Bitcoin (BTC/USD) Price Chart: 4 – Hour Time Frame (January 2021 – June 2021)
As it stands, Bitcoin trades between two major technical levels with resistance near $43,000 and support at $30,000. While a successful bounce off the $30,000 mark in mid-May may have been encouraging in the grander scheme of things, Bitcoin will have to avoid deeper declines to curtail the continuation of lower-lows and lower-highs – a trend that began in mid-April.
Prior support will likely act as resistance going forward, meaning bulls will have to negotiate a plethora of barriers if they are to recapture lost ground. Beyond initial resistance at $43,000, secondary resistance likely rests at $46,750.
Given the developing series of lower-lows and lower-highs, it is difficult to make a convincing bullish argument at this stage and Bitcoin may need to regain its luster before resistance can be taken out – a task that will become more difficult should meme stocks continue to steal the spotlight. That said, Bitcoin remains well beneath recent levels and lacks significant support until $30,000. A break beneath $30,000 would mark another significant downgrade in the technical outlook and would open the door to deeper losses.
–Written by Peter Hanks, Strategist for DailyFX.com
Contact and follow Peter on Twitter @PeterHanksFX