Over the past week, as a consequence of the Coronavirus outbreak, Bitcoin registered loss after loss, bringing a lot of investors close to losing their hope. However, these last days were like a glimpse of hope, as the world’s biggest cryptocurrency in terms of market cap gave the first recovery signs.
According to Rob Sluymer, technical researcher at Fundstrat Global Advisors, there is indeed room for recovery, but it would take Bitcoin a lot of time to get back on track.
The COVID-19 crisis forced a lot of people to sell
“The crypto breakdown over the past week mirrored the ‘get me out of everything’ panic that dominated all asset classes, whether they were defensive (bonds and gold) or not (equities). […] Lower highs and lower lows are in place for Bitcoin, leaving in a compromised, potentially vulnerable longer-term profile.”
Mr. Sluymer also added that Bitcoin managed to stay above its 200-week average, this being a major long-term structural support level for a lot of digital assets. Also, he pointed that back in 2015 and 2018, this indicator worked very well for the cryptocurrency.
“For now, technically we will again give Bitcoin the benefit of the doubt that it is attempting to bottom but recognize Bitcoin will likely need months of consolidation to repair the technical damage now in place,” he added.
Major buying pressure for under-$5,000 Bitcoin
Several investors and analysts are pointing out that right now there’s a huge buying pressure when it comes to Bitcoin, considering that the price point, of under $5,000 is surely a tempting one, but also indicates seller exhaustion.
On the other side, Bitcoin is also getting ready for the expected halving of the block reward in less than two months, which could mean that the prices will be able to reach $6,500 again, before finally stabilizing until the next bull run, sticking to something between $3,000 and $6,000.
“This is classic redistribution and would be very healthy for future Bitcoin price action and if we were to have bullish momentum going forward,” believes Luno’s head of business development Vijay Ayyar.