Bulls Defend $8,500 as Bitcoin Echoes Global Market Sentiment

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Bitcoin has followed the trend of the global markets and fallen away as fears over the Coronavirus impact money markets everywhere. As the Dow, the S&P 500, and the NASDAQ post record losses, it’s no surprise to see that the cryptocurrency markets are not immune, with talk of a global recession becoming more widespread and fuelling panic among investors of all kinds, leading to a selloff in the crypto markets.

Bitcoin Feels the Pressure

Bitcoin has now lost $1,500 this week, dropping as low as $8,525 yesterday before bouncing back to $9,000. However, the bounce couldn’t take it past this level and within 24 hours it had returned to its prior low, stopping at $8,530 this morning.

However, with the sentiment among all markets being one of doom and gloom, there is no suggestion that Bitcoin has the power to defy the trend and push back to previous highs.

Bitcoin Approaching Bull Run Support

Given Bitcoin’s current trajectory we need to look at support lines to see at what point the overall bullish sentiment could be invalidated:

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As we can see, Bitcoin has used up almost all the grace afforded it during its rise in January, sitting currently just $200 above its support line. Dropping below this level would not be disastrous in itself, but closing the day or worse the week under this level would cause us to revaluate Bitcoin’s midterm potential.

Alts Suffer the Same Fate

As expected, most alts have suffered the same fate as Bitcoin in both their BTC and USD pairings, although a handful of alts have bucked the trend and made gains, including POLY, COCOS, and BAND, all of whom are up in both pairings. Others, such as FTT and LINK are holding up remarkably well during the downturn, showing that they could be worth a look when the market settles.

Bitcoin’s halving narrative is of course a strong one, but it is no competition for a global pandemic and a potential recession. For this reason it would be wise to see where Bitcoin heads before making any long term plans, although there is the possibility to trade the bounces, if you’re feeling brave.