Bitcoin Set To Drop Towards $5,600-$5800 Support Level, Analyst Explains

Cash USD over Bitcoin BTC
Image courtesy of Reuters/Nazanin Tabatabaee/ WANA

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.

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,

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

Image: TradingView

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.

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Lujan Odera 385 Articles
Been in the field since 2015 and he still love everything blockchain and crypto! FC Barcelona fan. Author and journalist. Follow him at @lujanodera.
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