Bitcoin’s association with the US equity markets might have ended. For the past few days, Bitcoin’s rise was in tandem with Wall Street. But as of now, with the Dow Jones rose more than 285 points, while Bitcoin lost more than 5%.
Bitcoin fails to keep up even after retesting the 50 DMA.
- The 50 DMA is at $7,326.90. Bitcoin was for a short period above this point. However, with the Bears overpowering the Bulls, BTCUSD came down.
- BTCUSD now faces the 50% Fibonacci retracement at $7,913.46 and then the 61.8% retracement at $7974.14. Now, since it is trading below $6,950, it will face strong resistance at those levels. The 50 DMA will also be a potential resistance now.
These key Technical indicators are sufficient to claim that Bitcoin’s short term outlook is Bearish.
Check out the Bitcoin Chart by tradingview.
Macro-indicators that point to a further decline of Bitcoin:
- Bitcoin might not have bottomed out yet. The Coronavirus pandemic is a long battle now. The economy of countries is severely getting affected, and millions of people are losing their jobs. In the US alone, more than 16.8 million people have lost their livelihoods in the past few weeks.
- Moreover, in tough times such as the ones we are experiencing now, people prefer putting their money in safer investments. And Bitcoin is as risky as it can get. The volume traded right now is less. This implies that market manipulators are mainly driving substantial price movements.
- Bitcoin has little to no commercial use as of now. The only demand Bitcoin has in the form of traders who are interested in profit-making out of the price fluctuations. Bitcoin’s valuation is stupendously high. It is somewhat similar to the Dot com bubble of the late 90s.
Bitcoin would rise once it finds use commercially. And once it returns to correct valuations. Until then, it might be best not to jump into the Bitcoin mad rush.
