- Bitcoin newly established correlation with the traditional stock market could lead to a drop to $6,000 before May’s halving.
- A bearish pennant pattern technically suggests that Bitcoin price is not in the clear and is likely to slide towards $6,000.
Bitcoin price up and down movements in the last two weeks suggest that volatility is back and it is becoming difficult to predict the direction the price will take. Besides, these are different times especially with the Coronavirus pandemic in the picture. It just this Monday when the price of oil plummeted into the negative for the first time in history. While Bitcoin and oil are not correlated, the granddaddy of cryptocurrency has recently doubled-down on its correlation with the stock market.
BTC/USD dived in the wake of the oil price crash as stocks caved into the pressure. Support was established at $6,750 leading to a reversal that has ended with Bitcoin's spike above $7,000. Intriguingly, there was a pump in the price of crude oil which closed the day trading at $14.23 after a 3.27% growth. Major stocks such as S&P 500 and Dow Jones reacted upwards, however, they still closed the trading on Wednesday in the negative according to the data provided by Yahoo Finance.
Bitcoin price bearish scenario
Bitcoin recovery hit a wall before testing the key hurdle at $7,200. In other words, the pump above $7,000 was not strong enough. At the time of writing, the digital asset is valued at $7,135 and slightly in the hands of the bulls. The resistance at $7,200; a region that incredibly functioned as support in November 2019 following the downtrend from June’s highs at $13,800. It is apparent that a break above this zone, coupled with the upcoming halving speculation and volatility, BTC/USD could soar to $8,000.
Unfortunately, the longer Bitcoin price stays under $7,200, the stronger the sellers become. Moreover, the fear regarding COVID-19 is still hovering and the stock and oil markets could plunge again forcing Bitcoin into a downward path to $6,000. Technically, the formation of a bearish pennant pattern introduces the probability of the same drop to $6,000.
BTC/USD daily chart
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