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As the coronavirus pandemic continues to rage, both traditional markets and cryptocurrencies are unpredictable. Even gold does not give investors safety and Bitcoin is undergoing a rigorous test as a new asset class in an unprecedented financial and health crisis.

Daily crypto market performance. Source: Coin360
Daily crypto market performance. Source: Coin360

It seems that traditional markets are preparing for a new chaotic trading week, and the volatility is expected to return to the cryptocurrency market. However, given the rumors of US stock trading completely halted, it is difficult to forecast how the cryptocurrency market will work next week.

Although US Treasury Secretary Steven Mnuchin had previously stated that markets would remain open, if the disease did not improve, there could be disappointing measures. If these rumors become a reality, cryptocurrencies will have the opportunity to prove to be the only alternative to traditional markets.

How is Bitcoin keeping the momentum?

One of the important price points to note is the $ 5,400 mark. If Bitcoin (BTC) drops below this level, it will be a very bearish scenario for the cryptocurrency market. Although the price has risen to a daily high of $ 6,400 on Sunday, it needs to close above $ 5,900.

Weekly chart of BTC / USD. Source: TradingView
Weekly chart of BTC / USD. Source: TradingView

The moving average convergence divergence (MACD) indicator is showing some consolidation on the daily and weekly charts. For traders, this is usually a good sign to buy and assuming this continues, things can be quite optimistic for Bitcoin.

Daily chart of BTC / USD. Source: TradingView
Daily chart of BTC / USD. Source: TradingView

If the price breaks above $ 6,200- $ 6,400 before the weekly close, investors can expect a step towards the resistance of $ 6,900- $ 7,000, although the likelihood of this happening today seems quite low.

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Daily chart of BTC / USD. Source: TradingView
Daily chart of BTC / USD. Source: TradingView

Investors are still extremely bearish

Currently, Bitcoin's fear and greed index (Crypto Fear and Greed Index) is showing the value 11 – the level representing extreme fear. Although it has increased 2 points in the past few days, but this still shows the extreme fear in the market. If selling pressure causes the price of BTC to break below $ 5,900, then Bitcoin can retest the support of $ 5,400 again.

Crypto Fear & Greed Index. Source: Alternative.me
Crypto Fear & Greed Index. Source: Alternative.me

Another bearish sign to note is the head and shoulders pattern, which can start to form if the price drops below the above $ 5,400 support level. This could cause Bitcoin price to retest the support of $ 3,800.

Daily chart of BTC / USD. Source: TradingView
Daily chart of BTC / USD. Source: TradingView

Scenario in time to come

Overall, Bitcoin has been performing well since its March 12 correction and it can continue to do so as investors look for safe and quality investments.

Assuming Bitcoin is designed for a crisis, the current financial crisis may be the single largest test of this currency.

Like Genesis Mining's top operator, Philip Salter, recently told CoinTelegraph:

“If the ongoing economic crisis is being prevented, it will not mean a lot to Bitcoin. However, if there is a real crash, interest in Bitcoin will explode. It will be considered a barrier against the banking system. The more skeptics in the old economy, the more they will rush into Bitcoin. ”

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According to CoinTelegraph
Translated by ToiYeuBitcoin

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