Tanya Abrosimova
Independent Analyst
- Bitcoin may lose 100% of its value, but it won't go to zero.
- BTC/USD needs to clear $7,000 for the upside to gain traction.
Bitcoin has regained some ground on Wednesday, though it is still hovering below a critical level of $7,000. The first digital asset has gained 1.6% since the start of the day and over 2% on a day-to-day basis. Despite the recovery, Bitcoin is moving within the short-term bearish trend, which means we may see more sell-off before another bullish leg.
According to Intotheblock data, over 52% of Bitcoin addresses are in the money now. A cluster of 1.65 million addresses with nearly 830k BTC are waiting for the price to enter $7,050-$7,375 range as this development will bring them to a break-even point. The number of large transactions has decreased slightly together with the volume of such transactions, while stayed at 56.28% from the historical high 139.65 hit on April 6.
Bitcoin won't go negative
Cryptocurrency investors and traders touted Bitcoin's stability in the face of a major oil price collapse. However, the hardcore Bitcoin critic, Peter Schiff was fast to disillusion them. He agreed that Bitcoin would not drop below zero, but added that it was still a bad investment option.
Bitcoin bugs claim that oil's plunge into negative territory validates Bitcoin as an asset class, as despite its high volatility and big drops, its price never fell below zero. I agree that the downside risk in #Bitcoin is limited to 100%. Not exactly a compelling reason to buy!
BTC/USD: Technical picture
On the intraday chart, BTC/USD recovery is limited by 1-hour SMA200 located on the approach to $7,000. Once this psychological barrier is out of the way, the recovery may be extended toward the next important resistance created by 50% Fibo retracement for the downside move from February 2020 high. A sustainable move above this area will open up the way to $7,500. This level stopped the recovery at the beginning of April.
On the downside, the local support is created by daily SMA50 at $6,800. BTC remains bullish bias as long as it stays above this level. If it is broken, the sell-off may continue towards $6,600-$6,500. This area served as a good backstop during the previous downside correction. It includes the lows of April 13 and 16 as well as 38.2% Fibo retracement for the downside move from February 2020 high.
BTC/USD daily chart
-637231561900052371.png)
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended Content
Editors’ Picks
Dogwifhat price pumps 5% ahead of possible Coinbase effect
Dogwifhat (WIF) price recorded an uptick on Thursday, going as far as to outperform its peers in the meme coins space. Second only to Bonk Inu (BONK), WIF token’s show of strength was not just influenced by Bitcoin (BTC) price reclaiming above $63,000.
Runes likely to have massive support after BRC-20 and Ordinals frenzy
PUPS, WZRD, and PEPE are gaining liquidity through Bitcoin Ordinals. Creator of Bitcoin’s Ordinals protocol is debuting a new fungible token standard to rival BRC-20, Runes.
Ethereum shows firm support at key level as its correlation with US indices increase
Ethereum's price continued a sideways movement on Thursday as the market still awaits a trigger. Ethereum isn't alone in this horizontal trend; several major index funds have also traded sideways.
Mango Market attacker convicted of fraud and market manipulation
Mango Market attacker Avi Eisenberg was convicted by a federal jury on Thursday for "fraudulently obtaining" funds from the Solana-based decentralized exchange (DEX). He could face up to 20 years in prison for his role in the $110 million attack.
Bitcoin: BTC’s rangebound movement leaves traders confused
Bitcoin (BTC) price has been hovering around the $70,000 psychological level for a few weeks, resulting in a rangebound movement. This development could lead to a massive liquidation on either side before a directional move is established.