The Final Week of May – Bitcoin, Stocks, Airlines

Last week I wrote that BTC would touch the $8400 line, and I almost got it correctly – BTC went as low as $8600. Does it mean that bears will keep pushing even below $8200? Not as fast as I thought previously.

BTC is still moving within the same bear pattern for the past 12 day and continues to follow downtrend line. In order to break through this pattern it’s essential for bulls to go over the following marks:

• $9800
• $10500
• $11000

For a full-scale, bullish market we need to have one-week candles closing above those levels. Without closing above mentioned marks, I expect BTC to move back as low as $6400 by the end of summer.

We might repeat similar pattern, which we had in February, when Bitcoin moved from $10000 to $3800. While I don’t think that we will experience such a dramatic crash, it’s very reasonable to anticipate Bitcoin price at $6800-6400, especially if Bitcoin won’t be able to sustain further growth in June.

That being said, Bitcoin might still make another attempt to reach $9800 before falling down. How can we know if that’s coming or not? BTC needs to close 1D candle above $9280 and then $9500. It would be a good indicator of growing bulls.. Until then – we should expect BTC moving within downtrend line.

Personally, I don’t think that bulls will be able to push BTC above $9500 in the near time, but if they will – it will be a great entry point for my short position.

What about stocks? What’s important do we need to know about stocks?

Chinese stocks might get desisted.

Democratic Representative Brad Sherman has introduced the Holding Foreign Companies Accountable Act with the goal to make Chinese companies listing in the U.S. abide by this country’s capital-markets standards. The bill would require that foreign companies let the Public Company Accounting Oversight Board oversee the auditing of their financial records if they want to raise money by selling stocks or bonds to the American public. Failure to comply with strict demands of the US government might result in stock delisting from US exchanges large Chinese companies such as Alibaba Group Holding, Baidu and JD.com. While it remains unclear if Chinese companies will get delisted or will comply with regulations, they took 5% hit on markets today and might remain less interesting for investors until the situation gets cleared.

German Lufthansa received €9 billion ‘stabilization package’ from the government.

German airline Lufthansa said Monday it has received approval for a €9 billion ($9.8 billion) “stabilization package”. These news are quite important as it gives  positive signals to the airline industry across Europe and US respectively. Lufthansa climbed 7% today and I think that we might see 15-20% stocks recovery in the Airline industry by July since many governments are bailing out airlines. While it’s a risky venture to hold airline stocks at the moment, I still think that Airlines will slightly move in the price this summer, and will give good exit opportunities for those, who want to sell their airline stocks.

My summary for this week of trading:

a) I closed all my positions in oil, making over 68% profits

b) I allocated some funds towards Real Estate ETF in NYC, as I anticipate that post-COVID New York will show some healthy Real Estate markets

c) Planning to allocate more funds towards Ethereum, as it might go over $500 by the end of this year. I will write about this in my next article.