Bitcoin tanks after colossal oil collapse, but Bull case remains solid

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  • Bitcoin fell 4.30% as US oil futures fell below zero for the first time.
  • Cryptocurrency does not correlate with black gold, although it remains under the influence of stocks.
  • His crash on Monday has yet to deter market bulls.

Bitcoin took a surprise plunge on Monday as investors assessed the situation in a disturbing oil market.

The benchmark cryptocurrency fell 4.30% to around $ 6,748 a token soon after the futures price for US oil slipped into negative territory for the first time. The two assets remain uncorrelated, but the increasing correspondence of bitcoin with the stock market in the midst of the fast-spread coronavirus pandemic could have resulted in lower prices.

The Dow Jones Industrial Average slipped 2.4% to 23,650.44 on Monday, drawing inspiration from the oil market. The S&P 500 and Nasdaq Composite also plunged 1.8% and 1% respectively, showing that investors continued to seek safety away from risky assets.

Technical advantage for Bitcoin bulls

Bitcoin’s intraday fall has not stopped its prices from maintaining its current uptrend. The cryptocurrency plunged into what appears to be its temporary support before attempting a minor withdrawal before the Asian session on Tuesday.

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Bitcoin Finds Support Within Upward Channel | Source: TradingView.com, Coinbase

As shown in the 1D Coinbase graph above, bitcoin tested the support trend line for the upward slope of the saffron upward channel. The cryptocurrency rebounded slightly by 1.01% to reach an intraday peak close to $ 6,925, expressing its probability of further consolidating in the current resistance range defined by the lowest $ 6,800 and the highest by $ 7,500 high.

Meanwhile, the price located converging support in the 50-day moving blue wave. The bulls have attempted to keep the intermediate bullish bias in bitcoin near these support levels, confirming that they still have a technical advantage against a declining macroeconomic outlook.

“People say bitcoin is wild”, commented Frank Chapporra, a former Nasdaq reporter. “Throughout this [coronavirus] Crisis, we have seen a volatility in stocks that is thorny, Treasury yields have reached record lows, oil prices are falling below zero, the Fed’s unprecedented impression and bond buying. Right now, bitcoin could be more stable than anything else. “

Bearish risks

One of the most alarming bearish catalysts is Bitcoin’s growing proximity to US stocks. The oil shock could cause stocks to fall further as the week matures. Meanwhile, investors looking to neutralize their losses may start selling the first profitable thing they see for money.

This is troubling for bitcoin, which has jumped 77% since its cycle low. Bulls’ next goal is to keep support above $ 6,800. The floor could drive prices up to $ 9,000, as predicted in one of Bitcoinist’s previous analyzes.

Photo by Delphine Ducaruge on Unsplash



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