Bitcoin drops below $ 7,000, what's next?

Many days of consolidation after a 100% increase from the March bottom, Bitcoin dropped below $ 7,000 just a few minutes ago, reaching a low of $ 6,900 at press time. With the move down, the cryptocurrency is down 6% from its Thursday high and nearly 8% down from a high of $ 7,470.

Bitcoin dropped after stocks saw an extremely strong week, with both the S&P 500 and Dow Jones soaring as the corona virus curve began to show signs of peaking and even, despite claims of unemployment. at a record in the United States.

Spot gold price reached 1,685.60 USD / ounce according to Kitco; April gold delivery increased 3.34% to USD 1,740.60, recorded at 6h55 (Vietnam time) on 10/4.

Gold prices have risen to their highest level in a month after the US Federal Reserve (Fed) announced a new stimulus measure to combat the economic damage caused by the COVID-19 pandemic.

The Fed has launched a $ 2.3 trillion support program to strengthen local governments and small and medium-sized businesses to keep the US economy unaffected as the country fights the spread of nCoV virus.

Fed Chairman Jerome Powell said the central bank will continue to use all the appropriate solutions until the US economy begins to recover completely.

The ongoing correction of the cryptocurrency market has been somewhat anticipated

As Bitcoin Magazine reported earlier, Tom Demark (TD) Sequential on Wednesday printed a "9" sell candle on the charts of Bitcoin, Ethereum, Ethereum Classic, Cardano, Binance Coin, Litecoin, Onology, OmiseGo, Tron, Stellar and Tezos.

The so-called "9" candle, according to the time-based indicator, is often seen at market turning points. Case study: The "9" candle was seen at the bottom of $ 6,400 Bitcoin in December 2019 and peaked at $ 10,500 in February this year.

Moreover, the Stochastic indicator, a trend / momentum based indicator, recently printed an indication that Bitcoin was overbought. A leading analyst observed that it was 86% accurate for BTC.

What next for Bitcoin?

Traders expect Bitcoin to be further broken if the current levels are not maintained.

Tyler D. Coates, a technical analyst who commented that recent price action has seen BTC threatened to break an uptrend line held since the bottom of March, can see The return of cryptocurrencies for an average of $ 5,000.

Coates' downward sentiment has been echoed by others, like trader Sean Nance who thinks Bitcoin's recent price action, looks very similar to the beginning of the 2018 bear market.

The similarities on the line chart until 2018 are quite strange. I'm not saying that we MUST move to new lows here, but I certainly don't see how you can eliminate it.

Many are still optimistic about Bitcoin's long-term prospects

Arthur Hayes, CEO of BitMEX, commented that while Bitcoin is likely to retest $ 3,000 again if the global market pullback, his year-end price target is still $ 20,000, up 180% over at current prices.

On why he thinks this is the case, he cited monetary and financial solutions that the government and central bank are taking to prevent the collapse of the economy. International.

Everyone knows the change is ours, which is why central banks and politicians will throw all their tools into this issue. And I will repeat, it is inflation because more money will reduce real wages. There are only two things to own in the transition to any new system and that is gold and bitcoin.

Bitcoin technical analysis

The support zone of $ 7,080- $ 7,100 is once again acting as a strong buying zone. More importantly, it seems likely that a double bottom pattern forms near the $ 7,100 area. A low low formed near $ 7,092 and the price bounced back above $ 7,300.

The recent high is near $ 7,360 and the price is currently correcting lower below $ 7,300. There is a break below the Fib 23.6% retracement of the recent wave from a low of $ 7,092 to a high of $ 7,360.

Bitcoin is currently testing the $ 7,220 area and the 100-hour simple moving average (SMA). The Fib 50% retracement of the recent wave from a low of $ 7,092 to a high of $ 7,360 is also close to $ 7,226 to play a supporting role.

On the upside, the bulls are facing a stiff resistance near the $ 7,400 level. There is also a major bearish trend line forming with resistance near $ 7,340 on the hourly chart of the BTC / USD pair.

If the double bottom pattern is highlighted, the price could break out of the trendline resistance and $ 7,400 barrier. The major resistance area is near the $ 7,500 level, above which the bulls are likely to target $ 7,800 or $ 8,000.

Main support: $ 7,200- $ 7,080 and $ 6,700.

Main resistance: $ 7,340 - $ 7,400 and $ 7,500.

On the other hand, initial support is near the $ 7,200 area. However, the main analytical support for BTC is near the $ 7,080 level.

If the bulls fail to defend the support zone of $ 7,080, there is a risk of breaking the downside. The next support is near the $ 7,000 level, below which the bears are likely to target a test at $ 6,700.

You can see the price of BTC here.

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

Thạch Sanh

According to AZCoin News

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