After an earlier dip towards five-day lows around $5,600, bitcoin has bounced sharply and regained the $6,000 key level on Monday. During the local rally, the cryptocurrency got back above the 50- and 100-SMAs in the hourly charts but the ascent has slowed somehow around $6,500, where a relatively strong local resistance arrives.
Despite an aggressive bounce, the current recovery looks unsustainable, and downside risks continue to persist as the digital currency is yet to overcome a few resistance levels to confirm a bullish breakout in the short term. also, it’s still too early to call a bottom at this stage, as the sell-off could resume at more attractive levels and send the prices lower again.
The ongoing rout in the global financial markets is taking its toll on the cryptocurrency space as investors prefer to “sell everything”, including gold and digital currencies, amid a heightened uncertainly surrounding the coronavirus outbreak. The disease continues to spread across the globe, and the death toll rises further. Against this backdrop, many governments and central banks across the globe have been taking massive supportive measures but investors remain unconvinced by their efforts so far.
Today, the selling pressure around risky assets persists but the momentum gas slowed somehow. Against this backdrop, the leading cryptocurrency by market capitalization managed to attract some demand around the $5,600 support zone. Bitcoin is yet to confirm a break above $6,000 on a daily closing basis. On the upside, the prices may retarget the $7,000 figure in case of a sustainable move above $6,400. Otherwise, BTCUSD will likely fall back under $6,000 and probably to $5,600 should the current recovery attract some profit-taking.
If the token extends its local rally, it may challenge the key moving averages above the $8,300 area in the longer run. But considering a still negative environment in the traditional financial markets and a cautious tone expressed by investors across the globe amid the coronavirus crisis, risks for the digital currency are still skewed to the downside.