Bitcoin price has surged the last 7 days posting +25% returns at the time of this report. Based on technicals, Bitcoin could be surpassing a key resistance level that could result in additional upside in the near term. Bitcoins price is holding up well after losing nearly half of its value 2 weeks ago. As sentiment is starting to get a bit better in traditional markets, we take a look at some key levels to watch for BTC.
Bitcoin Technical Analysis
As mentioned in a recent report by Visionary Financial, Bitcoin signals from a historical standpoint were looking pretty solid, and it was argued that Bitcoin was steeply undervalued. At the time of that writing, Bitcoins price was hovering right around $5,800 and it was mentioned that $6,600 resistance could be targeted. The last few days BTC has continued an uptrend, posting nearly +25% gains the last 7 days. Regarding resistance levels, Bitcoin just passed $6,600 levels which was seen as a potential bullish indicator. The updated chart below outlines some price levels to keep on watch. If Bitcoins price can maintain $6,600 levels, it may test $7,500 in the short term. On the flip side, if BTC can't hold $6,600 levels, it could very well test re-test $5,600 support levels.
When traditional markets were tanking 2 weeks ago, Bitcoin followed the trend and lost significant value, scaling back nearly 50%. Since the original sell-off, Visionary Financial argued that Bitcoin was building solid momentum by establishing an uptrend and essentially acting non-correlated to gold and traditional markets. As traditional markets and gold continued to sell-off, Bitcoins price was establishing an uptrend which was a positive sign.
Stock Market Moves
Everybody is fully aware by now that Coronavirus outbreaks fueled the sell-offs in stocks. Earlier this month, traditional markets took a big hit as Coronavirus was labeled a "pandemic." This created global chaos as many companies were forced to scale back operations. Airlines and other critical industries were seeking massive bailouts to stay afloat. During this time, it was mentioned that many investors were rushing to cash, essentially selling any assets that were "liquid." Consequently, assets like Bitcoin and Gold were targeted due to their wide range of liquidity. As the virus spread throughout the globe, the Federal government was forced to take action by injecting liquidity into the markets.
The traditional markets started rebounding the last few days as the Federal government has injected $700+ billion into the financial system. Aside from this, the Senate just approved a $2 trillion dollar economic relief package to fight Coronavirus. As the death tolls have surpassed 1,000 in the U.S, it has put a major burden on companies, and even a larger burden on employees who are continuously getting laid off.
Investor sentiment has corrected a bit the last few days as the relief package is said to support families, banks, and businesses in the short term. The Fed has even gone as far as stating that they have "unlimited resources." As of now, the relief package was enough to stimulate investor sentiment this week. We should see if the move really has a true impact on market sentiment in the next week or so.
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