Bitcoin enjoyed a bounce after an anticipated break down following a two-week coiling inside a wedge, but it looks to be nothing more than a temporary reprieve before further downside. The resultant drop took it down to the high $5,000s before jumping some $400, but there is every chance this is a short-term relief bounce before more downside. The entire market is in a state of stasis, barely reacting to Bitcoin’s bounce as alts wait for a definitive move.
Dead Cat Bounce
As we suggested last week, Bitcoin was destined to resolve its two-week wedge in a negative fashion, and it duly delivered late on Friday, dropping from $6,700 to $5,858 yesterday. This was followed by a swift overnight bounce to $6,350, but there is no suggestion that this is more than a dead cat bounce:
$BTC – Throwback phase
Expecting price to push on from here to 64-66s – just another shorting opp as mentioned in the swing setup I shared yesterday – see chart attached
Currently long from $5870 pic.twitter.com/kTKpoKNdR2
— TraderXO (@TraderX0X0) March 30, 2020
Very solid reaction off the $5850 comp range VAL. As I mentioned vol junkies don’t get their breakdown out of the range immediately. Anywhere between 6350-6580 should be a good short and then play the range between there and the $5850 lows until proven trending. pic.twitter.com/k9QhnpRsce
— Tommy Ø (@7ommyZero) March 30, 2020
The Crypto Fear and Greed Index remains at 10, continuing the lowest cluster of ratings in the data platform’s history, which has seen an average of 11 over the past two weeks:
Global Markets Still Dictating Events
The reason for the high fear rating has very little to do with Bitcoin itself but continues to be a reaction to the ongoing uncertainty around the coronavirus and its impact on all markets. The S&P 500 to which Bitcoin has recently been correlated experienced a bounce at the tail end of last week thanks to the signing of a massive $2.2 trillion emergency package in the US, but with the country experiencing a growing number of cases and deaths, even this level of stimulus is not expected to alleviate a long term recession, which will continue to have a catastrophic impact on the global markets, potentially dragging Bitcoin down with it.