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Crypto enthusiasts always tried to differentiate their asset class, saying it was superior to stocks, bonds, Forex, and commodities.
In 2017, when Bitcoin prices reached a high of almost $20,000, they claimed it was a widely used method of payment and that it would survive any crash. The coin is still around, but it was hardly used as hyped.
Later, it was claimed that cryptocurrencies were a haven asset and that it should be compared to gold, but that idea was turned on its head, in 2020, as cryptocurrencies mirrored stock markets on the way up and down.
While there is a core of cryptocurrency fans that hold the asset in any weather, I think most investors and traders, add it to their portfolio when the world economy is growing, and they wish to hold risker assets. That is why cryptocurrencies are interesting today, as stock market indices and stock markets have stabilized following their defeating declines on the heels of the coronavirus crisis
Bitcoin, the bellwether coin, has stabilized in an ascending triangle pattern, and a break to the March 27 high of 6896 might trigger the coin to add 17.56% to its value and reach the $8119 level.
However, it is sibling coin, Bitcoin Cash (BCHUSD), that has caught my attention. The pattern is better defined, and a break to $238.3 might send the coin higher by 16.27% to reach the $276.9 level. A break to $238.3, might also lead to an even higher level, as the Bitcoin Cash could clawback 61.8% of its 2020 losses to reach the $304.8 level.
The alternative scenario is that the coin fails to breach the upper range of the pattern, and would instead try to reach the lower end of the pattern, the March 23 low of $198, with a risk trading back to its 2020-low of 141.6, on a break to the March 23 low.
By Alejandro Zambrano, Chief Market Strategist at ATFX.
