- Bitcoin managed to regain ground above $7,000 after a dismal start of the week.
- Global sentiments are improving, which is good for Bitcoin.
- The technical picture implies the downside correction.
Most part of the week Bitcoin has been controlled by bears that managed to push the price of the first digital coin below $6,500 before bulls woke up and engineered a strong recovery above $7,000. At the time of writing, BTC/USD is changing hands at $7,070, which is only marginally higher than seven days ago and slightly lower than at the beginning of the year. Bitcoin’s market capitalization is registered at $129.4 billion, which is 64% of the total market of digital assets.
What’s going on in the market
Traditional markets show some resilience despite terrible economic statistics and disappointing corporate reports. S&P 500 extended the recovery and hit the intraday high at 2884, which is the highest level since March 10. Obviously, investors were inspired by Trump’s promise to re-open the economy by May 1 and German’s intentions to let their citizens out of the homes.
Positive news has been popping up now and then, reducing the sense of gloom and despair. This trend is set to continue, as more countries will consider canceling the lockdown or loosening it up, virologists will proceed with vaccine development and experiments with the medicine for COVID-19. Even though the global economy will feel the consequences of this coronavirus pandemic for years, the good news is very welcome now; it adds some optimism, which is reflected in investors’ behavior on the markets.
Meanwhile, the cryptocurrency market is getting ready for bitcoin’s halving. The event is less than 30 days away, and it is a key conversation topic in the industry. The forecasts range from a sharp growth to a non-event or devastating collapse. It only means that halving will bring more uncertainty to the market and may trigger sharp volatility either ahead of the event and right after it.
This is one of the reasons, why traders and investors have been taking their assets from exchanges to stored in wallets. People prefer to wait-out the risk, which is understandable as many cryptocurrency exchanges, even such behemoths as BitMEX and Binance, tend to have technical issues amid high volatility.
BTC/USD: technical picture
From the technical point of view, Bitcoin regained ground above $7,000, but it is still vulnerable to losses if it fails to clear the next barrier created at $7,150 by a combination of strong technical indicators, including the previous recovery high and 50% Fibo retracement for the downside move from February high. Once it is out of the way, the upside is likely to gain traction with the next focus on $7,500 that stopped the previous bullish assault. A sustainable move higher will allow for a sharp recovery towards the next critical barrier of $8,000-$8,200. This resistance area is created by a combination of daily SMA200 and 61.8% Fibo retracement for the downside move from February 2020 high. A sustainable move higher will unleash Bitcoin’s bullish potential and create FOMO environment on the market.
Considering the downward-looking RSI on a daily chart, BTC/USD may undergo a bearish correction towards the lower barrier of the previous range of $6,500. This area is likely to serve as a backstop and a jumping-off ground for another upside wave. Otherwise, the bearish sentiments is likely to gain traction with the next focus on $6,150 (the lower boundary of the daily Bollinger Band) and $6,000. This development will negate the bullish scenario and bring deeper correction on the table.
The Forecast Poll showed a mixed picture as the expectations worsened on a monthly frame and stayed bullish on a weekly and quarterly basis. While it means that the market is more optimistic in the long-run, the price expectations on all time-frames are below $8,000, while the monthly forecast suggests that BTC may have another dip under $7,000.