BTL Group is one of our favorite blockchain stocks. It rose to $7.20 only 6 weeks ago. Since then, the stock has retraced and is hitting major support right now. The $4.50 price level must hold, and the chart shows why.
There is a strong correlation between BTL Group’s stock price and the cryptocurrency market. As cryptocurrencies hit a major top in the first week of June most publicly traded blockchain stocks (BTL included) also hit a major high. Consequently,with the recent weakness in cryptocurrencies most blockchain stocks retraced significantly.
BTL Group’s stock price lost some 35 percent as it fell from $7.20 to $4.50. That could seem to be a huge drop, but for blockchain stocks which are very volatile and which have gone up between 5 and 10 fold this year, it is not really that significant of an event.
What happens next in the cryptocurrency market will be impactful for BTL Group as well. All eyes are on Bitcoin, and how it will react on the coming SegWit event (see for instance this article on CNBC). Our eyes at InvestingHaven are on the correlation between cryptocurrencies and blockchain stocks like BTL Group.
Based on the current price strength in Bitcoin it could well be that the next phase in Bitcoin’s evolution will be bullish for its price. If that bullish scenario would occur we expect BTL Group to go higher from here, respecting its important support visible on the chart. In that scenario we expect BTL Group to test its all-time highs around $7 (approximately).
However, in a bearish scenario we would expect to see a breakdown in BTL, and it could take a while until before the next recovery would take prices to current levels.
The coming one to two weeks will be decisive for BTL Group’s stock price!
Do you want to know which blockchain stocks are worth buying and which ones to avoid? Subscribe to InvestingHaven’s Blockchain Stock Investing Research Service for a sound blockchain (stock) investing strategy >>
