BTCUSD Weekly Outlook – May 14, 2021

Last Updated on May 17, 2021

BTCUSD Outlook

Introduction

The bitcoin brokers are welcoming the statement of Stanley Druckenmiller, a Billionaire Hedge fund manager, that it is hard to unseat Bitcoin as a store of value for investment.

Elon Musk CEO of Tesla and Space X on the other hand now has a different bias towards bitcoin’s energy requirements.

Let’s jump into the technical and news events this week for BTCUSD.

BTCUSD Technical Analysis

Monthly Chart

BTCSUD monthly chart - 14th May 2021

Monthly Resistance Levels 65000.00

Monthly Support 46500

The BTC remains in a bullish trend on the monthly chart, as we expect the bulls to continue the bullish run after gaining some momentum. Stochastic indicator is showing that the price of BTC is in an overbought region and we may likely see the value drop in weeks to come.

The fall may likely push the price to the support level of 46500 which is about 17% drop. The psychological zones for the bitcoin brokers are the 65000 resistance and 46500 support zones for the trend to be determined.

Weekly Chart

BTCUSD weekly chart - May 17 2021

Weekly Resistance Levels: 64850.00 

Weekly Support Levels:  46965.2, 29250.1

The BTC has been ranging in between the resistance and support zones for the past eight weeks with no specific breakouts.

The upward trend is still healthy on the weekly chart as we can see how the price has risen since October 2020. However, we can see the oscillator showing that price is in an oversold zone and we may see the Bulls push the price higher in the trading week.

If the bullish momentum should fail, we shall see the Bears rejecting the value of BTC from the 64850.00 levels.

Daily Chart

BTUSD daily chart - May 14 2021

Daily Resistance Levels: 64909.00

Daily Support Levels: 50592.00, 47044.00

The sellers could take a short position from the established high of 64909.00 which led to the fall in bitcoin price down to 47044.00 low.

We expect the bearish run to continue if the bearish flag pattern is confirmed, and sellers reject the bulls test from the resistance zones. The Bulls will have to close above the psychological level of 664909.00 for them to have control of the market.

Bitcoin BTC News Events 

Can US Dollar lose its Status as the Reserve Currency in 15 years?

Since the COVID-19 pandemic has caused havoc on the US dollar that was the safe haven for fiat currency in terms of crisis has lost its strength in the financial market since 2020. 

However, BTC has solidified its position as a hedge against inflation compared to the dollar that has lost its value and performance. Druckenmiller believes that the flawed policies of the Federal Reserve are the key factor affecting the dollar in the international trade market.

Due to the rate at which the dollar is diminishing in value in the international market, it has aided digital assets like bitcoin and others to gain more popularity in the financial world.

The popular demand for BTC and other digital assets has forced many wall street giants like JP Morgan, Goldman Sachs among others to offer bitcoin-based investment for their clients who demand it.

Companies like Tesla and MicroStrategy and other Fortune 500 companies have invested in bitcoin and have made more profits in their balance sheet because of holding the asset compared to their lifetime operations.

The US regulatory body recently had an administrative change in the system. The Chicago Board Options Exchange filed two bitcoin ETFs with SEC recently while awaiting the approval of the eight bitcoin EFT filings.

However, the SEC is delaying the approval of the proposals while analyzing various factors regarding manipulations of a Bitcoin exchange-traded product. The US regulatory body has not approved a crypto EFT while its neighbours Canada approved a bitcoin EFT and some Ethereum EFTs like that of Purpose Group.

Gary Gensler is the new SEC chairperson after the administrative overhauling took place. He was a professor at MIT where he taught cryptocurrencies and blockchain technology previously. Some crypto proponents and bitcoin brokers believe that his knowledge and understanding of digital assets it could lead to productive crypto regulation.

The testimony of Gary on the Robinhood exchange and the GameStop saga before the House of Financial Service Committee shifted the confidence of many traders and investors. However, he stressed the need for an updated regulation that will limit manipulations in the market and protect investors. In this scenario, his appointment can either be a boon or bane for the Crypto world.

Conclusion and Projection

The COVID19 crisis led the FED and other central banks in various countries around the world to print money to aid their citizens via various stimulus packages which will influence inflation in the economy.

The popularity of digital assets such as BTCUSD was aided by the diminishing value of the U.S dollar in the financial market. If the dollar must be relevant in years to come, the Federal Reserves must do what it can for the U.S currency to have a real turnaround in the international market.

 

James S. Martin
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