In brief:
- Bitcoin has so far defied the Death Cross which is evident on the daily chart.
- The King of Crypto is currently trading at $6,350, reclaiming the important $6,000 support zone.
- However, the current price movement is reminiscent of 2018 and could fall further as all markets are affected by the Coronavirus.
With the new month of April only a few hours away, there is a lot of optimism with respect to the direction of the crypto markets. Generally, when CME Bitcoin futures contracts expire like they did last Friday, BTC exhibits bullish momentum 24 – 72 hours later. This past weekend had all the signs of the King of Crypto falling hard as there is currently a death cross that has formed on the daily chart.
Bitcoin Bounces at $5,840
However, Bitcoin managed to bounce from the $5,800 support zone at the weekly close and is currently trading at $6,350 (Binance rate) at the time of writing this. The resurgence of Bitcoin also coincides with the stock markets experiencing a bounce of their own with both the Dow and S&P 500 in the green as a result of President Trump signing the much needed $2 Trillion stimulus bill. This stimulus bill is meant to safeguard the American people from the devastating economic effects of the Coronavirus. This bounce by Bitcoin might is a defiance of the Death Cross which was identified only yesterday.
Current Bitcoin Price Action is Reminiscent of 2018
Taking a closer look at the behavior of Bitcoin’s, we experience a moment of deja-vu with $6,000 acting as the much-needed support for the digital asset. Such behavior by Bitcoin was last seen between February and November 2018 before BTC dropped hard to around $3,100 as a result of the Bitcoin Cash Hash Wars. The chart below gives a better visual cue of the situation.
Bitcoin’s Future is in the Hands of the Stock Market
In a recent analysis by seasoned analyst @MagicPoopCannon, he observed that BTC has this zone as a major support. He explains that if Bitcoin cannot get above it, it will become a resistance area.
Despite BTC’s current hold of the 200 week [Moving Average], things aren’t all rainbows and butterflies here. You can see that each of the last three weekly candles has closed at or below the lateral red resistance level . In 2018, that level acted as major support. However, we’re now caught up in it again, and if BTC can’t get back above it, it will continue to be resistance.
Magic would end his analysis by elaborating that Bitcoin and other crypto’s will continue being affected by the stock market turmoil as a result of COVID10. He added:
Bitcoin’s performance in the wake of the coronavirus outbreak has been pitiful. At it’s worst, it fell 65% from early February, when the coronavirus outbreak news really started to take hold. So, I wouldn’t be surprised if we see BTCbreak down below the 200 week MA, for the first time ever. I think it could easily dip into the 2000s, and potentially lower. This is the first recession Bitcoinhas ever been in, and it is already getting destroyed, as I always believed it would. As the global recession continues to worsen, Bitcoinand crypto should continue to fall.
(Feature image courtesy of Clifford Photography on Unsplash.)
Disclaimer: This article is not meant to give financial advice. Any additional opinion herein is purely the author’s and does not represent the opinion of Ethereum World News or any of its other writers. Please carry out your own research before investing in any of the numerous cryptocurrencies available. Thank you.
