Bitcoin performed surprisingly well last week, recovering from $ 6,100 last Sunday to a weekly high of $ 7,200, outperforming most assets. Unfortunately, analysts are warning of a breakdown to the pre-recovery level.
Could Bitcoin Fall 20%?
There is no doubt that Bitcoin has performed well in recent weeks, recovering from the low of $ 3,600 to the recent high of $ 7,200, as mentioned earlier.
However, according to Nik Patel – an analyst and author of “An Altcoin Trader’s Handbook” – weekly closing below $ 7,000 is likely to drop back to $ 5,680, which would be a 20% decrease. Patel’s chart shows that $ 7,000 was the weekly high of last week, which makes it important from a technical analysis perspective.
Long-term outlook shapes recovery
Although there are signs of negative development in the short term, many are convinced that the long-term outlook for Bitcoin is anything but bearish. For example, Morgan Creek Digital’s Anthony Pompliano recently identified two fundamental trends that will serve as “rocket fuel” for the BTC course:Central banks and money printing like there is no tomorrow: In an effort to prevent social turmoil and economic depression resulting from the coronavirus outbreak, central banks and governments have started taking emergency measures by distributing free money to consumers, lower interest rates to promote spending and inject trillions of dollars of liquidity into bond markets to keep the economy going.