Bitcoin continues its gradual recovery following a plunge witnessed nearly one month ago. On Wednesday, the digital currency remains above the $7,000 handle, showing a mild upside bias after a modest retreat yesterday. The nearest resistance arrives at $7,400, and a decisive break above it is needed for a rally toward the $8,000 handle.
The cryptocurrency markets have steadied in recent days, suggesting the volatility is abating at this stage, with the traditional financial markets looking relatively stable as well. Despite the recent signs of slowing growth in the spread of the coronavirus, investors remain nervous as the pandemic hasn’t reached a peak yet. As bitcoin tends to follow risky assets lately, the negative bias in stock markets suggests that the upside potential in the number one cryptocurrency is limited now.
Should BTCUSD fail to overcome the 50-daily moving average around $7,400 any time soon, the prices may get back below $7,000 in the days to come. However, if the bullish pressure persists, the token will target the $8,100 area, where the 100- and 200-daily moving averages converge. On the way to the current levels, bitcoin has overcome a few resistance levels after a recovery above $6,000. Now, the question is if the bulls manage to stay in control in the days to come.
Also, let’s not forget that the next bitcoin halving is nearing. Ahead of this event, demand for digital tokens may pick up amid expectations of a spike following the halving. Some market observers predict a strong rally in bitcoin following the event, as the event could bring more new users to the market and thus lift demand for the largest cryptocurrency by market capitalization.
In the near term, BTCUSD will likely continue its consolidation around the $7,000 figure which is now in market focus, as a confirmation of the latest breakout will act as a bullish signal and may push the prices towards the next barrier at $8,000.