Technical Analysis

BTC/USD Analysis – May 07, 2021

By LonghornFX Technical Analysis
May 7, 20214 min

Choppy Session in Play!

The BTC/USD was closed at $56,451 after placing a high of $57,843 and a low of $55,897. Bitcoin came under pressure after JP Morgan CEO Jamie Dimon found himself in an awkward situation when he had to admit that his clients were calling for bitcoin access. At the same time, he said that he was not a bitcoin supporter. On Thursday, a report suggested that Goldman Sachs Group Inc allowed Wall Street investors to trade with a derivative tied to bitcoin prices. The fifth-largest U.S. bank has opened up trading with non-deliverable forwards that eventually payout in cash. According to the report, the bank will protect itself from the cryptocurrency’s volatility by buying and selling bitcoin futures in block trades on CME Group using Cumberland DRW as its trading partner. However, Goldman has refused to comment on the report.

Furthermore, a new cryptocurrency called Chia has promised that it was greener than Bitcoin. The year 2021 has been a big year for cryptocurrencies as Bitcoin is now worth six times what it was 12 months ago. All this was accelerated after a boom in Non-Fungible Tokens that transformed the art market. As the growth in the crypto market picked up the pace, the critics started pushing bitcoin in particular as a uncertain bubble that utilizes a vast amount of electricity and produces no real value. Bitcoin and most other cryptocurrencies use a system in which currency is created or mined using computers to solve mathematical puzzles. This job takes a lot of strength and specialised hardware. However, Chia runs on a system that uses less energy called proof-of-space and time. This system requires users to show a reserved space in a specific amount of hard drive at a precise time. It means Chia will not use huge amounts of electricity and will not require miners to buy up every graphics card insight. The rising popularity of Chia also added to the downward momentum in BTC/USD.

On the flip side, a publicly traded Argentina-based e-commerce giant MercadoLibre has disclosed that it purchased $7.8 million worth of bitcoin earlier this year with plans to hold the asset on its balance sheet indefinitely. The company invested as part of its treasury strategy. MercadoLibre is publicly traded and has a market capitalisation of more than $76.3 billion. Meanwhile, a digital insurer with headquarter in San-Francisco, Metromile Inc., unveiled its plans to make massive bitcoin purchases. The company made Bitcoin a core part of its business operations, offering further evidence of the growing mainstream adoption of digital assets. On Thursday, the company declared that it would soon give policyholders the option to pay for insurance and receive payments on eligible insurance claims in Bitcoin or dollars. This made Metromile the first insurance company to both accept premiums and play insurance claims in cryptocurrency.

BTC/USD Intraday Technical Levels

Support Resistance

55617.6 57563.6

54784.3 58676.3

53671.6 59509.6

Pivot Point: 56730.3

BTC/USD - Technical Outlook

The BTC/USD is trading at 56,887 level, having violated the sideways trading range of 52,255 – 56,452. Currently, the BTC/USD pair is holding above a support level of 56,220 level. The 20 and 50 periods EMA (Exponential Moving Averages) support an upward trend, and these can underpin the Bitcoin price around 56,220 and 55,850 level. On the 4 hour timeframe, the BTC/USD pair has closed a symmetrical triangle pattern that’s suggesting indecision among investors. Typically such patterns drive sharp breakouts in the market. Above resistance level of 57,620, the pair’s next resistance stays at 59,000. The leading indicators demonstrate a solid bullish bias as the RSI and MACD has crossed over into the buying zone. The BTC/USD pair’s support stays at 56,335 levels. Below these levels, the BTC next support holds around 53,736. Conversely, the violation of 57,650 resistance exposes Bitcoin towards resistance areas of 59,966. All the best!


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