Bitcoin is currently going through turbulent times thanks to the global pandemic that is the Corona virus and the resulting action taken by the US Federal Reserve in an effort to curb possibilities of a financial crises. Bitcoin is now trading far below the $10,000 plus prices we saw just a week ago and may still dip into the $8,100 range before making a comeback. Bitcoin halving promises higher prices despite incoming dip, however.
Last week, coronavirus fears led to drop in price for Bitcoin as high as 14%. Bitcoin hadn’t seen a drop so steep in over three months. In addition to lower prices for Bitcoin spurred by fear of global pandemic, prices for the popular coin were also affected by rate cuts made by the Federal Reserve.
Almost immediately after the rate cuts were announced, BTC slid approximately 2% and continued the southward trend to reach prices as low as $8,400 by March 2nd. At the time of writing BTC is selling at $8,750 and change and has been holding steady for the past 24 hours since the interest rate cuts made by the Federal Reserve.
In January, the situation for Bitcoin looked very positive, and to many that positive outlook still remains. The problem now, however, is that bulls will have to wait for a while until prices bottom out and selling has subsided. The light at the end of the current tunnel is the incoming halving event which many predict will push BTC to all-time highs. Of course, there are no guarantees that higher prices will occur but by looking at past data the possibility seems strong indeed.
Until the halving event takes place a lot can happen. Global turmoil, advancements in blockchain tech in the financial sector, and a full-blown financial crises are just a few examples of factors that could very well change the playing field for the world’s most popular crypto. It is not expected that the price for BTC will drop below the $8,200 mark, however. The reason? Prices dropping lower than $8,200 would mean breaking through the bottom of the 200-day MA – a situation that has never taken place.
The 200-day MA is a strong indicator for investors watching out for major trends on the charts. The fact that Bitcoin remained above the 200-day moving average is a very good sign that the Bulls are showing their support.
Should the 200-day bottom hold up, it would mean good news for Bitcoin bulls. While the comeback might not be a fast one, it could spell an upward trend once the halving event takes place. Going on a bull run after halving is exactly what many are looking for because it is predicted that prices will reach far higher than $10,000 per coin.
The only thing that will stop Bitcoin from making its come back as predicted is a sustained close under the 200-day moving average support that has been established.
Another piece of good news indicating that we may not have to wait until the halving event in May to see a turnaround in Bitcoin’s prices is that Bitcoin seems to have leveled off over the past couple of days. Current trading prices are looking steady for now and are hovering higher than support levels between $8,650 and $8,700. The 24-hour charts are holding strong, but Bitcoin is having trouble finding traction in either direction.
The fact that Bitcoin isn’t moving is a good sign. It means that despite coronavirus fears and instability coming from a weaker Fed Bitcoin appears to be holding its own. It is very likely that the people responding to turmoil have had an effect on Bitcoin’s prices, but it is also just as likely that we have seen the extent of those effects due to the fact that most Bitcoin holders are not so easily moved by world events. If that is the case, we should to major price rebound fairly soon: at least a jump up to $9000.
Another positive indicator that Bitcoin is fighting back against coronavirus fears is the recent raise in hashing power from Bitcoin Farms. Over the past week we saw exahashes per second exceed 117 which is higher than it’s been in a month. The reason comes down to efforts made by China’s biggest farms which have begun to resume business as usual. As the coronavirus outbreak limited travel and shipping lines throughout China, it became difficult for farms to maintain levels of production they were used to. With a virus outbreak winding down in China, mining efforts are gearing up once again.
Looking at the daily charts for Bitcoin over the past few days, we have seen a few signs of an incoming bullish reversal. Mondays jump in price of 4.5% created a doji candle signaling a reversal in price. The candle set up a support level of $8,400 which happened to be the low on Sunday. Currently, BTC is holding well above that support as mentioned earlier and is remaining just above the 200-day MA – at least for now.
Should prices close below the 200-day MA is a sustained way, the lower support would be the new low. While there are a few indications that the moving average will be supported it is difficult to say at the moment which direction BTC will go in the coming days. That said, mining operations getting back on track, markets balancing out after the shock incurred from the rate cuts, and the impending halving event all likely lead to higher prices for BTC in the coming weeks and months.
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