Bitcoin Surges as Fear Takes Over
- Bitcoin is well above trend line
- It breaks above previous close
- The safe haven crypto is threatening $8800
Bitcoin markets have rallied again to kick off the week, gaining over 2% as traders continue to worry about global growth and the threat of the coronavirus.
There is a real fear in the market, and as Bitcoin has been used for safety from time to time, there is an argument to be made that the rally was a safe haven move. However, a case could be made to suggest that, perhaps, the rally was due to a technical setup to begin with.
Technical analysis stronger by the day
The technical analysis for this pair is getting stronger by the day. The Bitcoin against the US dollar market is currently trading at the $8775 level and has broken significantly above the close from the previous session. This is a good sign, as it shows momentum is starting to pick up yet again. There are a whole host of reasons to look at this chart in a positive light, even if it is just for the time being.
The fact that the market is above the previous downtrend line is also a good sign, but traders should also note that the market is currently threatening the $8800 level. Previously, the $9000 level had been of significant resistance, and if the asset can break above that level, then it’s obviously a very bullish sign for the market.
The 200-day EMA underneath has been supportive, just as the 50-day EMA is starting to curl higher. If the 50-day EMA can break above the 200-day EMA, then the market is very likely to react positively to the “golden cross.”
The $9000 level will have a certain number of ramifications for the market from a psychological standpoint, but we have seen noise in that area in the past.
The market certainly looks as if it is going to threaten that area. If it can clear it, that would be a sign that it is going towards the crucial $10,000 level above, which had previously been very important.
Recent days have been bullish
It should be noted that the last couple of days have been bullish while traders around the world were fearful in general when it comes to the coronavirus, global slowdown, and the Chinese economic issue. The question now is whether or not this is money trying to escape China. That would actually be a negative for Bitcoin as it tends to act as a temporary external pressure.
If the market were to break down below the 200-day EMA, which is currently trading at the $8225 level, it could threaten the recent uptrend observed in this market. Expect plenty of volatility, but right now it looks like the buyers are fully in control.
That being said, it is important to keep your position size in mind as this market continues to be noisy, to say the least.