Following Bitcoin’s bout of consolidation within the mid-$6,000 region, the benchmark cryptocurrency has seen a slight decline that has led it down towards the support that has been established around $6,000.
This decline today has come about against a backdrop of bearishness in the equities market, with virtually all of the benchmark indices seeing some notable losses.
Analysts believe that this could create a downwards tailwind that also leads BTC to decline, which could invalidate all of the bullishness stemming from its recent monthly close.
Trader: Bitcoin Likely to See Further Downside Despite Bullish Monthly Close
At the time of writing, Bitcoin is trading down just over 3% at its current price of $6,250, which marks a notable decline from daily highs of over $6,500 that were set yesterday during its bout of sideways trading.
Over a weekly period, BTC has been trading sideways in a relatively large trading range between $5,800 and $6,800 – with the crypto finding some hints of stability within the middle of this trading range.
It is important to note that the crypto was able to close its monthly candle at around $6,500 yesterday, which analysts consider to be bullish.
George, a popular cryptocurrency trader on Twitter, explained in a recent tweet that he still thinks BTC is poised for some near-term downside in spite of its strong monthly close, noting that he is watching for a movement to $5,500.
“BTC: Monthly closed bullish, but I think we see some downside first before heading higher. First target for our shorts around 5.5k,” he noted.
Monthly closed bullish, but I think we see some downside first before heading higher. First target for our shorts around 5.5k.
Went more in depth in our discord.
— George (@George1Trader) April 1, 2020
Will Economic Turbulence Continue Leading BTC Lower?
There’s no question the pandemic-related selloff seen within the equities market throughout the past few weeks has created a downwards tailwind that put pressure on Bitcoin and other cryptocurrencies.
Chase – another popular crypto analyst – explained in a tweet that although BTC could see a “scam wick” to clean out liquidity, he believes it will soon see significantly further downside.
“BTC: Typically when price re-enters an old range, it breaks down almost immediately. I expected a quick retest of range high then a sharp move to 6055 (especially with SPX dumping hard). Something feels off to me. Think we may get a scam wick to clean out liquidity up there,” he explained.
Typically when price re-enters an old range, it breaks down almost immediately. I expected a quick retest of range high then a sharp move to 6055 (especially with $SPX dumping hard).
Something feels off to me.
Think we may get a scam wick to clean out liquidity up there. pic.twitter.com/6u7vwTNLYL
— Chase_NL (@Chase_NL) April 1, 2020
How Bitcoin trends as the traditional markets continue declining should offer insight into where the entire cryptocurrency market will head throughout the coming month.
Featured image from Shutterstock.