Bitcoin crossed the $7,200 mark on Thursday. It was a much-needed break from the consolidation phase for all the Bitcoin enthusiasts. However, since then, the BTCUSD has been trading around the $6,700 range. It hasn’t been able to push past the $7,000 barrier even once after that.
The fact that trading volumes are pretty low has added to the distrust of the investors. Some analysts and self-proclaimed Bitcoin experts are pointing that this could be the calm before the storm. Bitcoin could drop to par $4,000 levels soon. And they might just be right!
Let us take a closer look at the BTCUSD technicals to understand better:
- If we bring up the daily chart, it can be observed that Thursday’s rally is a candle with a small body and a large wick. This indicates that there wasn’t a substantial Bullish momentum at play.
- BTCUSD reached the 61.8% Fibonacci retracement point. It has formed strong support at $6,650.
- As of now, BTCUSD is trading at $6725. Pivot is at $6518.26.
- Relative Strength Index has a neutral view.
The path ahead for the BTCUSD
- On pulling up the weekly chart, and extending it to view the historical prices, we would be able to backtest the prices.
- It can be observed that the trend for the Bitcoin has been a consolidation around the $6,800 – $7,200 range.
- This region could potentially work as a resistance.
- If Bitcoin breaks out of this region, and that too with large traded volumes, the BTCUSD could potentially reach the $9,000 level.
Bitcoin prices would be closely associated with how the COVID-19 pandemic is being fought off by various countries of the world. As of now, it might be too early to associate a Bullish signal with Bitcoin.
However, it has a possibility of crossing the $9,000 level mark, if the consolidation is broken with high volumes. Until then, it would be advisable to tread with caution.