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The price of bitcoin once again overcomes a major hurdle at the sub $9k area. Crossing the resistance at that level, the bulls seem to have taken charge, and market sentiments now lean towards a bullish bias in the short-term. However, the bears couldn’t wait much longer before prices fell off to lower levels.
Bitcoin Takes Gains As The US Treasury Demands Additional $3 Trillion In Response To Covid19
The price hike seen in bitcoin earlier today came amid reports that the US treasury department is demanding an additional $3 trillion dollars in response to the covid19 global pandemic. The funds, which actually amounts to $2.99 trillion would bring the US debt closer to $25 trillion.
As more Americans continue to file for unemployment, it appears the government would do whatever it takes to cater to its citizens amid the nationwide lockdown, a prerequisite for curbing the spread of the virus.
However, bitcoin finds a way to leverage the opportunity to rise against the dollar amid market sentiments shifting towards the negative bias as a result of the news.
Analysts’ Views On Bitcoin And Treasury Debt
Popular bitcoin analyst, Anthony Pompliano has weighed in on the issue of US national debt and the probable consequences it may have on the US dollar.
Anthony Pompliano, also known as Pomp posted on Twitter recently while explaining that a rise in US national debt is a long term disease for the dollar especially when the government can’t eventually pay back debts.
Talking about bitcoin’s price performance, popular bitcoin analyst, Plan B recalls that bitcoin has recorded an all-time-high price within the last 12 months.
His post, however, signifies that the cryptocurrency is sure getting well prepared ahead of its forthcoming block halving.
Bitcoin Technical Analysis
Tuesday, May 5, 2020, 05:44 +0100 UTC the price of BTC began a bullish momentum and within a couple of hours, the top cryptocurrency has broken the major resistance previously set at the $9k level.
As the price waved back to test the area again, the broken resistance later acted as a support level around 08:45 +0100 UTC, further confirming that BTC may have set sail for greater heights.
At 09:45 +0100 UTC, BTC is changing hands at $9,023 as analysis points to further successful bull movement in the short term. This inbound movement promises to push BTC to the sub $9.500 level.
BTC 1-Hour Price Chart
On the 1 hour chart, the relative strength indicator (RSI) line seems to navigate towards the 68.00 marks. This clearly indicates that though the bulls may have taken charge, they may be in control for only a short time before the bears gear up too.
As the price of the BTC approaches the overbought condition, there is an inbound corresponding period of sell-off when the price is expected to make a little correction before continuing its original bull run.
BTC Daily Price Chart
BTC printed a shooting star candle on the daily timeframe. The RSI remains in the overbought condition while only moving sideways for several hours. This may be indicative of a resistance to a further bullish movement but all pointers remain bullish at the moment.
Yesterday, Bitcoin failed to press towards the higher zone and this may turn the market’s movement towards the low end of the aforementioned trading zone.
Further, a close below this level could send BTC/USD even lower towards $6.540. Having noted that, the weekly support level underlined on the chart (zoomed in) should be monitored.
On the other hand, a close above the high end of the zone points to a stronger bullish momentum and this may instigate a rally towards $10.507. If BTC closes above that level, the price could extend the rally towards $12.320. In the event that the latter occurs, the weekly resistance area and levels marked on the chart should be watched along the way.
Bitcoin Takes A Bow, Falls Below $9k Again
The price of bitcoin once again slipped below the $9k area having only stayed there for a couple of hours. In the moments following the rapid price pump, the cryptocurrency succumbed to selling pressure and fell, while losing about 10% in the process.
The price of bitcoin at the moment is $8.120 and further downside seems highly possible in this sub $8k area.