Bitcoin Set To Drop Towards $5,600-$5800 Support Level, Analyst Explains
Bitcoin expected to see a short rise past the $7,100 USD level but the near term prospects look gloomy for the top crypto, top trader wrote on Thursday. Following the current trend in the equity markets, which is reacting to a possible increase in jobless claims – expected to hike towards 1 million to 4 million – BTC sentiments signal a bearish momentum towards the $5,800 level.
“BTC/USD set to test $7,100 before bearish reversal”
A popular crypto trader on Twitter, Crypto Michael, expects the price of BTC/USD to breach the ever evading $7,000 level before facing a reversal. In a bid to increase liquidity in the market before taking profits, Michael believes the bulls will push the price towards a ceiling of $7,100. The relative strength index (RSI) oscillates around the 55 buy zone.
Might have another spike towards $7,100 to take liquidity, but overall I'm still expecting downside to come.
First area I'm watching is the $5,600-5,800 zone.
Equity markets are also in red today + tomorrow is CME futures expiration day. pic.twitter.com/thEFmFhxtt
— Michaël van de Poppe (@CryptoMichNL) March 26, 2020
However, a breach above the $7,000 psychological level will not give a clear buying signal as Technical chart analyst, Crypto Cactus explained on Twitter,
$BTC HTF Update
Still no clear signs of which direction we will be heading next as PA repeatedly tests this strong region around $6800-$7000, flipping this into support would be great!
Personally not going to long into such clear resistance but which do you see playing out? pic.twitter.com/lBBbFWP9Ir
— Cactus (@thecryptocactus) March 26, 2020
A drop towards the $5,800 support region
The current global pandemic is affecting assets across the board and the spike in unemployment may force more people to sell. The equity market has lost billions of dollars and keeps falling, which may impact a bearish stance on BTC/USD. The need for cash is on the rise and as seen in Venezuela, where Bitcoin is used as a gateway currency not for HoDLing purposes.
“First area I’m watching is the $5,600-5,800 zone. Equity markets are also in red today + tomorrow is CME futures expiration day.” – Crypto Michael
Daily charts further signal doom for the top crypto as the price hangs dangerously below the SMA 50 line, a very bearish signal in the near term. Notwithstanding, the CME cash-settled futures are expiring tomorrow which is a key signal in what direction the price will take.
Despite the increasing pressure on Bitcoin due to the spread of the COVID-19 virus, one analyst believes it’s not yet time to sell BTC. Furthermore, the upcoming halving (in less than 50 days) gives a signal of a possible boost in price as supply rate is cut in half.
Anyhow, despite visible resistance in the chart, this aint the time to sell $BTC spot. With a crumbling economy and halving in less than two months, who in the right set of mind would offload large amounts at such bargain prices? Any leg down would just be used to accumulate more
— CryptoYoda (@CryptoYoda1338) March 26, 2020
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