Bitcoin (BTC) has had an eventful weekend as it dropped from $6,700 to $6,000.
The King of Crypto has tested the $6,000 support zone a few times.
This area of support is crucial as a death cross is forming on the daily chart.
At the time of writing this, all global citizens are taking precautions to safeguard their health and wealth from the devastating effects of COVID19. When we look at our favorite cryptocurrency of Bitcoin, it too is having a hard time maintaining the $6,000 zone of support that it has held onto for a week. BTC is currently trading at $6,108 (Binance rate). Its future in the markets looks very bearish as shall be explained.
Death Cross on the BTC/USDT Daily Chart
BTC/USDT daily chart courtesy of Tradingview.com
Further analyzing the daily BTC/USDT chart courtesy of Tradingview.com, we make the following observations.
Firstly, a death cross has formed as can be seen with the 50 (white) moving average, crossing the 200 (green) moving average from above. Such an event is used by many chartists to confirm a bear trend. In the case of Bitcoin, the drop on the 12th and 13th of March marked the beginning of this bear trend brought about by the economic effects of the Coronavirus.
Secondly, BTC has a resistance around the $6,900 area. This was illustrated in a previous analysis. $3,700 still remains as the strongest support in this period of crypto market uncertainty. $6,000 is also a support zone, but it could break down in the hours to come depending on how the stock markets open tomorrow, Monday, March 30th.
Thirdly, the daily MACD also looks bearish with the histograms indicating that buying has reduced. Its moving averages also look set to converge without having a chance go above the baseline to the upside.
With the CME futures having expired on Friday the 27th of March, one bearish hurdle has been removed from Bitcoin’s path at least for another month. However, with the Death cross forming on the daily chart, it might be a few more days of bearish market activity for BTC and the entire crypto markets. The only glimmer of hope for bulls might just be the way the stock markets open during regular floor trading in a few hours. If it is a bullish week in the stock markets, BTC might experience a bounce based on its current correlation with the S&P 500.
(Feature image courtesy of DDP 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.