Bitcoin Price Analysis: BTC/USD looks at the divorced from reality stock market
- Bitcoin may resume the upside if the stock market continues growth.
- BTC/USD recovery is still capped by $7,150-$7,200.
Bitcoin correlation to stock markets is one of the hottest topics discussed in the cryptocurrency markets. While BTC movements have no clear correlation with the global stock markets, the improved sentiments help the first digital asset to push through another critical resistance level. The US stock market seems to be on a recovery path after a major collapse triggered by the economic consequences of COVID-19 pandemic. Stocks of Facebook, Amazon, Netflix, Alphabet, Microsoft, Apple, Nvidia that are also known as FANGMAN started the week just 7% below their historic highs, despite dismal macroeconomic statistics and soaring unemployment in the USA.
What crisis? Total market cap of FANGMAN (Facebook, Amazon, Netflix, Alphabet, Microsoft, Apple, Nvidia) at $5.53tn, only 7% below ATH of $5.95tn, Holger Zschaepitz, the author of the German media outlet WELT, wrote on Twitter.
However, many economists believe that this growth is not healthy which means that the poor get poorer, while the wealthy get more wealth. This situation may eventually lead to social unrest, especially if the economy dives deeper into recession, and let Bitcoin shine to its advantage. At least, that's what cryptocurrency enthusiasts are hoping for.
BTC/USD: technical picture
At the time of writing, BTC/USD is changing hands at $7,170, mostly unchanged both on a day-to-day basis and since the beginning of Monday. The first digital asset managed to settle above psychological $7,000; however, the further upside is limited by the next strong resistance $7,150-$7,200. This barrier is created by 50% Fibo retracement for the downside move from February high and it stopped BTC recovery on the weekend. Once it is out of the way, the upside is likely to gain traction with the next focus on $7,500.
On the downside, the support is created psychological $7,000, followed by the daily SMA50 (currently at $6,880). This line limited the recovery since the beginning of April, now it serves as strong technical support. If bulls fail to maintain the price above this barrier, the sell-off may be extended to support area $6,500-$6,400, which includes the lowest levels of the previous two days and 38.2% Fibo retracement for the above-said movement.
BTC/USD daily chart
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Author
Tanya Abrosimova
Independent Analyst
