Bitcoin breaks the $ 5400 line that will cause every bull's effort to "break down"

As the coronavirus pandemic continues, the market, both traditional and cryptocurrency, remains unpredictable. Even gold has failed to provide safety for investors and Bitcoin is undergoing a rigorous test as a new asset class in an unprecedented financial and health crisis.

As the traditional markets prepare for another turbulent trading week, volatility is expected to return to the cryptocurrency market. However, with rumors of US stock trading completely halted, it's hard to say how the crypto market will perform in the new week.

Although Treasury Secretary Steven Mnuchin has previously stated that markets will remain open, desperate times may be forced to take desperate measures. If these rumors come true, cryptocurrencies could prove to be the only alternative to traditional markets.

How much should Bitcoin hold?

Bitcoin maintains $ 5.9k 2

Weekly chart of BTC USD. Source: TradingView

One of the key price points to note is the $ 5,400 mark. If Bitcoin drops below that level, it will be a very bearish scenario for cryptocurrencies in general. Although the price has risen to a daily high of $ 6,400 on Sunday, a close above $ 5,900 is needed.

Bitcoin maintains $ 5.9k 3

Daily BTC USD chart. Source: TradingView

Currently MACD is showing some consolidation on daily and weekly charts. For traders, this is usually a good sign to buy and assuming this continues, things can seem quite optimistic for Bitcoin.

Daily BTC USD chart. Source: TradingView

If the price breaks above $ 6,200- $ 6,400 before the weekly close, investors will look to the resistance level of $ 6,900- $ 7,000, although the likelihood of that happening today seems low.

Investors are still extremely discounted

Currently, the Crypto Fear and Greed Index is showing 10 representing extreme fear. Although it has increased 2 points from the previous week, this still shows the extreme fear in the market. When selling pressure leads to a break below $ 5,900, Bitcoin can test the support of $ 5,400 again.

Bitcoin maintains $ 5.9k 5

Crypto Fear and Greed Indexes. Source:

Another bearish factor to note is the potential head and shoulders pattern may start to form if the price falls below the above $ 5,400 support level. This could cause Bitcoin to retest the $ 3,800 support level again.

Bitcoin maintains $ 5.9k 6

Daily BTC USD chart. Source: TradingView

Bitcoin difficulty is expected to fall by more than 10% on the local bottom forecast

Each time Bitcoin difficulty has dropped by more than 10% in the past, it has marked a local bottom for the dominant cryptocurrency. On March 27, bitcoin's mining difficulty is expected to decrease by 10.2%.

Analyst Nunya Bizniz said:

“Adjusting Bitcoin's difficulty led to a change in the difficulty of finding miners blocks. They happen every 2 weeks. There have been 4 cases with -10% or lower adjustment. The fifth case is the next correction, estimated at -10.2%. The market bottom? ”

The adjustment of Bitcoin mining difficulty comes after the BTC price dropped significantly from $ 8,000 to $ 6,200 in less than two weeks. At the lowest point of the month, Bitcoin price dropped to as low as $ 3,600 on major cryptocurrency exchanges.

Adjusting the mining difficulty above 10% usually marks the bottom of bitcoin, but not always.

Over the past nine years, Bitcoin has gone through five adjustments to the mining difficulty of over 10%. Although the Bitcoin price has risen over time since the correction, it has not led to an immediate spike in some cases.

The decline in mining difficulties often coincides with the market bottom because historically, Bitcoin has tended to bottom when investors began to show the highest levels of fear.

When investors surrendered, mining centers closed due to insufficient revenue to cover costs and businesses began to "stand by their arms", the accumulation period began at low prices. The accumulation over the next few months creates a stronger foundation for Bitcoin to recover in the medium term.

Overall, Bitcoin has performed well since the March 12 correction, and it may continue to do so as investors seek quality, safe investments.

Suppose, Bitcoin is designed for a crisis, and the current financial crisis may be its biggest test.

You can see the price of Bitcoin here.

Disclaimer: This is not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.


According to AZCoin News

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Nguyen Diep

My name is Nguyen Manh Cuong. I was born in a poor village in Ba Vi district, HA NOI province - windy and sunny land. Currently

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