BTC Price Shaky Near $67K While Oil Surges on Middle East Tensions: What's Next? (April 2 Update)
When such geo-political tensions as war are playing out, the commodity that acts as the barometer for the stock markets of the world is oil. When oil climbs rapidly, as it is doing on Thursday, most assets are generally going to go in the opposite direction. Already on shaky ground, could Bitcoin be tipped over the precipice?
Oil makes a higher high
Source: TradingView
As can be seen in the crude oil chart in the daily time frame, with crude oil up more than 8% on the day so far, a local higher high has just been made. Add to this that the support floor is probably confirmed at $99 - $101, and we have a recipe for oil to get back to the recent high of just under $120.
An ascending trendline is also adding its support. Once this, and the $100 horizontal level are broken to the downside, it will likely mean that the Middle East conflict is over, and there would potentially be a resulting surge in the stock market.
Three important rejections
Source: TradingView
The short-term view for the $BTC price is rather a busy chart, but it shows that the price has been rejected from the major $69,000 resistance level, the neckline of the head and shoulders pattern, and now possibly from the bottom of the bear flag.
As already mentioned, given that oil is breaking out to the upside again, this is not an environment where Bitcoin is going to thrive. Gold and silver are also coming down sharply, so it’s probably going to be a case of waiting to see how this latest stage of the Middle East conflict is going to play out.
The horizontal support levels at $66,000 and $65,000 are crucial here. If the $BTC price falls beyond them, this could be where the price loses touch with the bear flag and starts to plummet. The measured move out of the head and shoulders pattern is to $59,000.
$60,000 next?
Source: TradingView
Looking at the daily chart, it’s hard to see how the bulls are going to pull the Bitcoin aircraft out of this next potential nose dive. Yes, the bulls aren’t done yet. There is the possibility that there could be another bounce back inside the bear flag, but with the bear market trendline not far above now, it will be difficult to see how this will be broken with the bearish setup that confronts the $BTC price.
It’s clear from the daily view that the price came back to the neckline of the head and shoulders, and that the rejection confirmed the validity of the pattern. A fall down to $60,000 would appear to be the most probable next move.
All the main support levels
Source: TradingView
The weekly view of the $BTC price shows all of the main possible stopping points for this next potential plunge. The red arrow is the full extent of the measured move out of the bear flag. This leads down to around $38,000, which does tie in with a good support level for the 2021 bull market.
Will the price fall this far? It would be a 70% descent from the all-time high, and this would be in line with previous bear markets. Of course, the price would be very unlikely to just plunge all the way down to this level. If it did, we might very well have a v-shaped recovery straight after.
It would perhaps be more likely that the price comes down to around $50,000, and that after this a bottom is ground out, with maybe the odd quick plunge lower that gets bought up again.
What is certain, is that nobody knows precisely what is going to happen next. It is on the balance of probabilities that we are going to have a continuation of the correction to the downside. Just how far down will that be?
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.
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