Bitcoin Price Erratic After Second Biggest Daily Decline in a Month

Bitcoin Takeaways

  • Spot bitcoin rose 1.46 percent to $9,654 on a 24-hour adjusted timeframe after its 6.72 percent drop on Tuesday.
  • The rebound lacked adequate volume, leaving bitcoin with a higher probability of continuing downwards.
  • Raising hopes of an economic recovery could keep the cryptocurrency afloat above $9,000. Meanwhile, escalating U.S.-China tensions could propel it back towards $10,000.
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Bitcoin price climbed 1.46 percent to $9,654 in the last 24 hours, but its uptrend showed signs of weakness amid a less-enthusiastic trade volume.

The benchmark cryptocurrency began Thursday in a negative area, trading marginally lower below the opening rate. At a 0.17 percent intraday loss, the move expressed atypical price stability, indicating traders’ short-term bias conflict about the bitcoin market.

bitcoin, btc usd, cryptocurrency, crypto

BTCUSD stable above $9,650 | Source: TradingView.com, Coinbase

The halted recovery trend followed Bitcoin’s second-biggest daily decline on a 30-day timeframe. The cryptocurrency on Tuesday plunged by 6.72 percent after failing to hold its gains above $10,000, a healthy resistance level. Observers blamed capitulation at the end of miners for the said intraday crash.

But the plunge further appeared like a bearish fractal on repeat. Bitcoin has repeatedly failed to close or sustain above $10,000 in 2020. Additionally, a long-term descending trendline (black) with origins dating back to December 2017, is also acting like a double-layered price ceiling for the cryptocurrency.

While the price can still march upward, but it will most likely face the same trendline. That would follow another pullback that could extend beyond $8,600-9,300 – bitcoin’s current support zone. Meanwhile, traders may watch the rising pink trendline as an interim price floor for a potential upside pullback.

Macro Outlook

The bitcoin market is seeing a corrective action also as economic optimism improve around the globe. DailyFx currency strategist Ilya Spivak told CNBC that investors’ risk appetite is increasing as the economies reopen after the coronavirus-induced lockdown. That has helped global equities rise four-days in a row.

Bitcoin so far recovered alongside the risky stocks but the latter promises investors lesser risks and lower price volatility. That may be one of the reasons why Bitcoin’s uptrend has slowed down near $10,000.

There is also a section of traders that believes the cryptocurrency will rise.  Their argument is the rising tensions between the U.S. and China over Beijing’s new draconian security law in Hong Kong. A similar conflict last year had led bitcoin prices higher by more than 150 percent.

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