Bitcoin Price Holds Key $5.9K Support, Avoiding a Retest of Recent Lows
Bitcoin price continues to be negatively impacted by the Coronavirus pandemic but traders can prepare by watching for these important bullish and bearish signals.
As the Coronavirus pandemic continues to unfold, markets, both traditional and crypto, remain highly unpredictable. Even gold has failed to provide safety for investors and Bitcoin is undergoing a demanding test as a new asset class in an unprecedented health and financial crisis.
Crypto market daily performance. Source: Coin360
As traditional markets gear up for another week of turbulent trading, volatility is expected to return to the crypto market as well. However, with rumours of U.S. stock trading halting completely, it’s hard to say how the crypto market will behave this coming week.
Although Treasury Secretary Steven Mnuchin has previously stated that markets will remain open, desperate times may call for desperate measures. If these rumours materialize, cryptocurrencies could prove to be the only alternative to traditional markets.
How is Bitcoin holding up?
BTC USD weekly chart. Source: TradingView
One of the major price points to be aware of is the $5,400 mark. If Bitcoin (BTC) falls below that level, it will be a very bearish scenario for crypto as a whole. Although the price rose to a daily high of $6,400 on Sunday, a close above $5,900 is necessary.
BTC USD daily chart. Source: TradingView
Currently the Moving Average Convergence Divergence (MACD) is showing some consolidation on the daily and weekly charts. For traders this is typically a good signal to buy on and assuming this continues, things could look quite bullish for Bitcoin.
BTC USD daily chart. Source: TradingView
If the price breaks above the $6,200-$6,400 before the weekly close, investors will look for a run to the $6,900-$7,000 resistance, although chances of that happening today seem low.
Investors remain extremely bearish
Currently, the Crypto Fear and Greed Index shows a reading of 11 which represents extreme fear. Although it’s up 2 points in the previous few days, this still shows extreme fear in the markets. If selling pressure leads the price to break below the $5,900 mark, Bitcoin may test the $5,400 support again.
Crypto Fear & Greed Index. Source: Alternative.me
Another bearish feature to note is the potential head and shoulders pattern that may be starting to form if the price drops below the aforementioned $5,400 support. This could lead Bitcoin to retest the $3,800 support again.
BTC USD daily chart. Source: TradingView
Looking forward
Overall, Bitcoin has been performing well since the March 12 correction and it may continue to do so as investors look for quality safe-haven investments.
Supposedly, Bitcoin was designed for a crisis, and the current financial meltdown may be its biggest test yet.
As Genesis Mining head of operations, Philip Salter recently told Cointelegraph:
“If this economic crisis is contained, then it will not have major implications for Bitcoin. However, if there is a real collapse, then the interest in Bitcoin will explode. It will go back to being seen as a hedge against the banking system. The more skepticism people will have in the old economy, the more they will flock to Bitcoin.”
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
