Why Bitcoin (BTC) is in a Free Fall and the Key Support Levels to Watch
Bitcoin (BTC) has dropped hard in the last 12 hours, breaking several support zones in the process.
In brief:
- Earlier today, Bitcoin (BTC) was trading at $7,900.
- The King of Crypto seems to be in a free-fall associated with the global impact of the Coronavirus.
- Key support zones have been lost, including $7,800, $7,500, $7,300, $7100, $6,900, $6,500, $6,300, $6,100 and $5,800.
Bitcoin (BTC) is in a free-fall since 00:00 UTC. The first few minutes of March 12th, 2020, found the King of Crypto trading at $7,900 with relatively good support at the $7,800 area. However, with the battle against the Coronavirus ongoing on a global scale and the lockdown of Italy and quarantine measures across Europe and the United States, things look thick for not only the crypto markets but the general global economy. BTC is currently trading at $5,500 at the time of writing this.
Key Bitcoin Support Levels Lost in an Instant
In approximately 12 hours, Bitcoin (BTC) has lost the following key support zones: $7,800, $7,500, $7,300, $7100, $6,900, $6,500, $6,300, $6,100 and $5,800. Further checking the daily chart, the only support levels left, are $5,500, $5,300, $5,100 and $4,900 before we retest levels in the lower $4,000. If it comes to the latter situation, Bitcoin (BTC) will probably retest December 2018 levels in the $3,000 range.
Also to note, is that the current price of BTC is below the 50 (white) and 100 (yellow) daily moving average as illustrated in the chart below.
Why Bitcoin is in a Free-fall
It is self evident that the global financial markets are in turmoil due to the following reasons:
- The rapid spread of the Coronavirus from its epicenter in Wuhan.
- Manufacturing in China on a standstill due to quarantine measures in the country.
- Oil price wars between Saudi Arabia and Russia.
- The World Health Organization officially categorizing the Coronavirus as a pandemic.
- Italy on total lockdown to curb the spread of the pandemic.
- President Trump halting air-travel between the United States and Europe.
- Multiple schools closing in the United States and Europe.
- The NBA being suspended after a Utah Jazz player tested positive with COVID19.
- Hollywood star, Tom Hanks, and his wife, announcing they have contracted the virus.
In summary, the Coronavirus effect on the global economies has been the ultimate test for Bitcoin since its first block was mined in 2009. In a period of one week, we have confirmed that the digital asset is heavily correlated to the traditional stock markets as well as global events associated with the Coronavirus.
Key Levels to Watch for Bitcoin (BTC)
As earlier mentioned, Bitcoin (BTC) is on a trajectory to retest support levels at $5,300, $5,100 and $4,900. If these areas do not hold for the King of Crypto, we will be looking at situations similar to December 2018 where BTC bottomed out around $3,100. However, there is a slight possibility that it could go lower and retest June 2017 levels of $2,100.
(Image courtesy of Kamil Pietrzak on Unsplash)
Disclaimer: This article is not meant to give financial advice. Any additional opinion herein is purely the author’s and does not represent the opinion of Ethereum World News or any of its other writers. Please carry out your own research before investing in any of the numerous cryptocurrencies available. Thank you.
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Original article posted on the EthereumWorldNews.com site, by John P. Njui.