Bitcoin in Danger of Breaking $6K After Forming Double Top
Bitcoin has slightly declined during the last 24 hours, according to Coinmarketcap data, but the drop might extend in the coming hours and days. Currently, the BTC/USD pair is trading at $6,616.25 as of 7:47 UTC.
Bears Might Take Control of Bitcoin Mood
Yesterday, the price couldn’t break above $7,000 on most major exchanges and formed a double top on the hourly chart, which is a well-known bearish pattern in technical analysis. The first top showed up on March 20 when Bitcoin recovered some of its previous losses amid a rally that detached it from traditional markets.
Nevertheless, the rally couldn’t push it above the psychological level of $7,000, which has discouraged bulls.
Besides, the price is dangerously approaching the support line of its uptrend that took off on March 16. If it breaks below it, we might see the largest cryptocurrency trading at around $6,000 again. However, if the support holds, we could see a bullish ascending triangle pattern breakout take place if volume picks up.
So far, the only positive sign from a technical analysis perspective is that the 50-day moving average has recently broken above the 100-day and 200-day moving averages, which should act as a healthy bullish sign. Nevertheless, the 50-day and 100-day moving averages can cross their lines again soon, which would put additional pressure on the Bitcoin price.
If the price breaks below its support line, it could quickly fall to $6,000, with the next likely support level down at $5,000.
Can Fundamentals Help?
The fact that the US Fed expressed its readiness to pump as much cash as needed should have been a bullish sign for the cryptocurrency, which has a capped supply. However, this is not the case at least in the short term, as Bitcoin has decided to follow the declining stock markets. Previously, the cryptocurrency has closely followed the US and European stock markets to get hints about next moves.
Yesterday, the US Senate approved the biggest economic stimulus package in history, worth $2 trillion. Now, the legislation 96-0 should go through the House of Representatives.
Despite the unlimited quantitative easing pledges from central bankers, nothing is clear at the moment since the COVID pandemic can take an unexpected turn in either direction.
Last week, Fundstrat said that Bitcoin would take months to recover.
Do you think Bitcoin will manage to handle the bearish pressure this month? Share your thoughts in the comments section!
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