Crypto Daily - Bitcoin (BTC) has begun its recovery. Now up 15.6% since its Monday low, and no small increase of $7,600 since then; Bitcoin appears to be following the recovery seen in the Japanese Nikkai 225 Index. Could this be a v-shaped recovery for both?
Nikkai on road to recovery
The Nikkai 225 is an index of the top 225 companies on the Tokyo Stock Exchange (TSE). Since a horrendous plunge from top to bottom of 26% over only 5 days, the Nikkai 225 Index has recently recovered 12.4% of this.
The unwinding of the Yen carry trade, and the fact that crypto was the only sellable asset over the weekend, meant that Bitcoin took a terrible beating, as traders looking to unwind their positions sold $BTC hard, because it was the only asset that could be sold.
The weekly price chart for the Nikkai 225 Index shows a huge wick down to the horizontal support. This wick down also nicely tested the upward trend line. The Japanese stock market could proceed back to the highs from here, although the carry trade unwind is probably still taking place, so caution should be maintained.
It’s not just the Japanese stock market that is experiencing this kind of recovery; both the S&P 500, and the tech-heavy Nasdaq exchanges in the U.S. are starting to claw back the huge losses sustained on Monday.
Bitcoin outperforms them all
As for Bitcoin, the alpha cryptocurrency is outperforming them all. It can be seen that the heavy selling over the weekend and into Monday crashed the price through the confluence of the bottom of the bull flag, and the 0.618 fibonacci.
However, it can be observed that the price was also bought up heavily once it got into this incredibly low environment for what is still a bull market. The $BTC price is currently up against some strong resistance at the $57,000 level. Should it be able to battle past this, a return to the top of the bull flag could be on the cards.
If this becomes a full-on v-shaped recovery, look for the weekly, 2-weekly, and monthly stochastic RSIs to turn back around and signal the kind of massive upward momentum that can push $BTC back to, and through the all-time high.
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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