Donald Trump tweets Bitcoin down, no long-term consequences
Who would have thought that Donald Trump could influence bitcoin with a tweet? And what long-term consequences does this have? We’ll quickly go into the charts for you!
News or technical analysis?
Yesterday evening at ten to 9 Donald Trump tweeted that he did not accept Nancy Pelosi’s offer for the new stimulus package for the Bitcoin Machine United States. Immediately after the tweet, the prices of global stock markets fell by about 2 percent. And bitcoin could not make it either, the bitcoin price also fell by 2 percent. You can see that on the hourly chart below.
Or is there something else going on? A few hours before Trump’s tweet, the bitcoin price had already broken out of a rising channel. These are two parallel trend lines. This negative outbreak hinted hours earlier at a further decline.
In the end it could also be a combination of both: the bitcoin price broke out of the channel and Trump’s tweet caused another push down. In the short term, bitcoin still seems to attract a lot of attention from the stock markets.
But on daily charts it is not so bad
On the hourly chart, a 2% drop seems quite a lot. But if we look at the day graph, little has actually changed.
The rate of bitcoin is still moving in a triangle, and now seems to be supported at 10,500 dollars (8,929 euros). That is the red line on the chart above.
This is an important level, because at the beginning of this year and in June this was a major resistance. If bitcoin can find support here, then that is a very positive signal.
It will be exciting
In the longer term, it becomes exciting which choice bitcoin makes. Below you can take a look at the weekly chart of bitcoin.
The line that runs below the price is the moving average of the last 21 weeks, the 21-week moving average. This appears to be a random line, but in the past this average has served as a strong support and resistance.
In the bull market of 2016 and 2017, for example, the 21-week moving average served as support after each dip. Is the blue line now relevant again? Then bitcoin needs to find support here and rise further from here.
What do we expect from bitcoin?
Back to the short term, because what do we expect from the bitcoin price in the coming days? Below you look at the four hour chart of bitcoin.
Does bitcoin find support at $10,570 (€8,985), the orange line on the chart? Then the rate can rise to 10,910 dollars (9,274 euros), the green line. This is the price at which bitcoin previously encountered resistance, and this coincides with the top of the triangle.
But when bitcoin falls, the rate first finds support at $10,375 (€8,820). That is the top red line on the chart.
Does bitcoin break through this support and the bottom of the triangle? Then the exchange rate finds support at 10,000 dollars (8,501 euros), a strong psychological boundary for many investors.
Translated with www.DeepL.com/Translator (free version)