Bitcoin price is starting to show some bullish signs on Monday after a decline by nearly 15% over the past week. BTCUSD registered late-January lows below the $8,400 important support on Sunday and shifted into a recovery mode at the start of a new trading week. As such, it is possible that the pair is forming a local bottom and may regain the upside bias in the short term.
Interestingly, the current rebound coincides with a rise in the global financial markets, as investors decided to reenter the market following an aggressive sell-off in stocks that was the most massive since the financial crisis of 2008. Against this backdrop, bitcoin’s safe-haven status comes into question as the first cryptocurrency has been showing signs of correlation with risky assets these days.
On the other hand, bitcoin is trading at low levels and thus may attract buyers that will push the prices back above the $10,000 handle. Let’s not forget that the third hard fork is coming and will take place in May. Ahead of this event, the appeal of BTCUSD may rise in the months to come and even send the prices to fresh highs above the $10,500 level, registered in mid-February.
Furthermore, bitcoin could appreciate in the longer run and benefit from its isolation from political uncertainty that will rise later this year, ahead of the US Presidential election. In this context, the leading cryptocurrency by market capitalization may come as a more stable asset than the dollar that will likely suffer a heightened volatility amid the upcoming developments on the political front.
But in the near term, bitcoin could resume the decline, and the technical picture remains bearish, as long as the prices remain at least below the 50-daily moving average around $9,200. Currently, the pair is challenging the 200-DMA at $8,700. Once above, the digital currency will retarget the $9,000 figure. On the downside, a daily close below $8,400 will mark the extension of the negative scenario and could open the way towards $8,000. Anyway, the technical picture in the hourly timeframes has improved following a rejection from local lows.