Plenty of nerves and a pervasive fear have entered the crypto market as investors perhaps brace themselves for more potential tit for tat strikes, as Israel and Iran face off. Bitcoin appears to be using the more bearish sentiment to traverse sideways and downwards. However, the resulting chart pattern could well be a very bullish bull flag.
Fear pervades markets
Times are uncertain. In traditional markets, the S&P 500 is down 4.2%, the Nasdaq 100 is down about the same, and the overall sentiment for the traditional markets is one of “Fear”.
In the cryptoverse things aren’t going particularly well either. Even though the Fear and Greed Index is still in “Greed”, bitcoin is down another 16% since 8 April, which followed the 17.5% which terminated in early March. Luckily, there was a rally in between, so $BTC really just went back down again to the $60,000 support level.
Source: Coingecko/Trading View
Bull flag forming
One benefit of the up and down movement for bitcoin is that this is painting a bull flag pattern in technical analysis. If $BTC is able to hold the support at $63,000, or even go down as far as the low $60,000s, this is just confirming the base of the bull flag.
Also, the more time that $BTC spends inside the bull flag, the more explosive could be the move if and when $BTC decides to break to the upside. The measured move of the bull flag would be to $96,000.
The bearish scenario
On the other hand, if the $BTC price falls down through the bottom of the flag and breaks the supports all the way down past $59,000, the next stop would likely be a deep correction to $51,000. Should this be the route that bitcoin chooses, this would entail a good 30% reversal.
Traders and investors might be rather nervous right now. Funds going into the US Spot Bitcoin ETFs have really dried up over the past week or so, and the bleed out from the Grayscale ETF (GBTC) has tipped the scales towards $BTC outflow rather than inflow.
Fortunes are won and lost in such times
With one eye on any new conflict developments, and the other eye on how the traditional stock markets are falling, there could be more pain in store for bitcoin and the crypto market.
However, the question might be asked as to whether Israel would really want to imperil itself by launching another tit for tat strike against Iran? Even the most ardent warmongers must realise that there would be no winners if the conflict escalated in such a way.
Therefore, with this in mind, the time to buy might be when everyone else is bearish and selling. Fortune favours the brave, or investing into a potential war is the height of stupidity? Fortunes are won and lost in such times.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
