Bitcoin struggled to trade back above the $5,650 level of resistance overnight as it proceeded to retest the $5,000 level of support.
It continues to form a consolidation pattern following last week’s miserable descent to the downside, which saw it fall as low as $3,600.
While the period of consolidation could be considered as a positive, the lack of volume or a significant bounce leads towards a more bearish scenario where Bitcoin could retest 2018’s low of $3,150.
As previously reported by Coin Rivet, Bitcoin experienced an exponential moving average death cross on the daily chart, which compounds the bearish sentiment across the market.
A death cross is where the 50 EMA crosses the 200 EMA to the downside to indicate that short-term momentum is down, thus paving the way for a further correction.
The hope and optimism surrounding the Bitcoin halving in May now seems to have subsided, with traders and investors now focusing on the short-term impact of coronavirus.
Despite the fact that the coronavirus first reared its head in China, it has now become a global pandemic with Europe being an epicentre.
With countries beginning to lock down to stem the flow of the virus, European economies look set to suffer, which will likely have a knock-on effect on Bitcoin due to its correlation to the stock market.
Key levels to look out for on the Bitcoin chart are at $5,000, $4,250 and $3,150, although a clear break above $5,600 could provide a set-up for a bounce to the upside.
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In August 2008, the domain name bitcoin.org was registered. On 31st October 2008, a paper was published called “Bitcoin: A Peer-to-Peer Electronic Cash System”. This was authored by Satoshi Nakamoto, the inventor of Bitcoin. To date, no one knows who this person, or people, are.
The paper outlined a method of using a P2P network for electronic transactions without “relying on trust”. On January 3 2009, the Bitcoin network came into existence. Nakamoto mined block number “0” (or the “genesis block”), which had a reward of 50 Bitcoins.
If you want to find out more information about Bitcoin or cryptocurrencies in general, then use the search box at the top of this page. Here’s an article to get you started.
As with any investment, it pays to do some homework before you part with your money. The prices of cryptocurrencies are volatile and go up and down quickly. This page is not recommending a particular currency or whether you should invest or not.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice.
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