Bitcoin collapse stopped, but for how long?
|- BTC/USD needs to get above $6,000 to negate immediate bearish pressure.
- HODLers might get worried if the sell-off continues.
Bitcoin settled at $5,560 handle after one of the deepest collapses in History. The digital coin No. 1 has lost over 11.6% of its value in recent 8 days, which qualifies as the third largest weekly fall in history. Bitcoin's market value has settled at $97.9B, which is the lowest level since October 28, 2017.
From both technical and psychological points of view, the coin needs to return to the area above $6,000 as soon as possible, to mitigate the bearish sentiments. The longer it stays below, the bigger the chance that the sell-off will be extended.
“[Bitcoin] has just broken below a 12-month support band defined by the February, April, June, and August-October lows, we would caution traders/investors from presuming this breakdown is a headfake,” Rob Sluymer, technical analyst at Fundstart Global Advisors, wrote in a recent research note.
He also added that the next major support lies with $5,000. If the price reaches this level, the long-term investors or so-called HODLers may get concerned. These bitcoin lovers claim that they are going to stick to their investments no matter what, but an extended sell-off may force them to change their mind.
Currently, BTC/USD stays in oversold territory, though the Relative Strength Index is flat with no signs of upcoming reversal.
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