Bitcoin has been reporting weekly gains back-to-back since its bleak March 2020 plunge.
The cryptocurrency benchmark dropped by 1.80 percent on Sunday but managed to end the week at $7,130 a 3.22 percent higher. The uphill push extended a recovery from its mid-March lows which has lifted bitcoin’s price by more than 85 percent.
The new Bitcoin rises came in tandem with similar upside movements on the US stock exchange, demonstrating the short-term connection of the offbeat asset with conventional equities.
Qiao Wang, Messari’s marketing manager, said in a note that stocks are growing on fears that the Federal Reserve will do little to shield the US economy from the rapidly spreading pandemic of COVID-19. As for bitcoin, the analyst also credited stronger retail interest for the boom in its market, as well as the upcoming halving case.
“Short-term, as usual, I don’t have a strong view,” wrote Mr. Wang about the cryptocurrency. “I think it could easily swing between $5,000 and $9,000 due to a a variety of forces like the demand for the USD and the hype around halving.”
Bitcoin Flips Technical Resistance
Potential for a $9,000 bitcoin price also increased after the cryptocurrency jumped above its moving average over the short term. In two out of five instances since April 2019, breaking above the 50-daily MA has led to a 282 percent increase in bitcoin prices by June 2019 and a 43 percent increase by February 2020. The remainder were fakeouts.
The $7,200-range (represented by a green bar) now serves as the last set of resistance. And to be broken before bitcoin pursues a $9,000 bull run. The selection has been serving as a strong field of support to upside attempts by the cryptocurrency since May 2019.
Because of the mining rewards halving, floating above it could give traders strong traction, particularly amid favorable buying conditions. It could drive the price of the crypto to $9,000 in the second quarter of the year.
Part of the reason for this is a long-term downward trendline (blacked). Which has prevented the price since December 2017 from achieving full-fledged bull runs. As of now, the trendline coincides with a flipping support/resistance point in the range above $9,000.
In the meantime, keeping an eye on a possible fakeout is smarter. If bitcoin slips down below the 50-daily MA, then there is a greater probability of falling below $6,500 – to $5,000.