At the time of publication of this article, Bitcoin was trading at $7,317.5. The rise of the cryptocurrency can be linked to the phenomenal rise of the US Equity markets lately.
However, several Bitcoin analysts claim that this rally by the Bitcoin will be shortlived. As soon as the equity markets start falling amid the Coronavirus fear, the BTCUSD will quickly follow suit. And once Bitcoin starts falling, it could fall all the way to $4,000 levels.
Technical Indicators that point to a massive drop of the BTCUSD
- The BTC is on a downtrend since February 12. Since then, it is forming lower highs. The trendline is acting as a vital resistance.
- Bitcoin dropped below $3,700 on March 13. After that, it is forming higher highs and higher lows. The higher lows are much steeper than the higher highs. This is creating a rising wedge pattern, which is a solid Bearish indicator.
- The volume traded is very low, as is evident from the daily chart. Thus, without a recovery in the volume, the rise in the BTCUSD prices could indicate the presence of market manipulators involved in artificial pricing.
- The Pivot is at $7,270. Bitcoin will face stiff resistance at $7,500.
External factors affecting the Bitcoin prices
The US equity markets opened higher on Tuesday; however, the market went into a correction mode later in the day. One thing is for sure and that is the existence and fear of the Coronavirus pandemic. Until unless countries around the world find proper measures to combat the COVID-19 virus, things are not going to improve significantly.
Bitcoin’s rise right now is backed neither by strong Fundamentals nor strong Technicals. Traders looking for quick gains by being bullish in this market might suffer the most.