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Bitcoin Dips Below $7,000 and Causes Crypto Market to Fall

April 20, 2020 at 18:59 by Matt Jackson

Bitcoin has dipped below $7,000 for the first time since April 16 today and, in the process, dragged the rest of the cryptocurrency market down with it. The one cryptocurrency that has bucked today’s negative trend is Stellar, which has posted a nearly 14% gain. Meanwhile, traders should be prepared for a big move in the coming days as volatility has tightened to a three month low.

Bitcoin most recently crossed $7,000 resistance on April 16. Since then, it has traded between this level and a high of $7,280 with $7,000 flipping to form resilient support. However, earlier today, prices fell to $7,000. Although there was a brief period of recovery, digital gold continued through the support level and is currently trading just below $6,950: a decline of 3.82% over the past 24 hours.

There had been some expectations of a move upward as Bitcoin passed the 50-day moving average at the end of last week. If Bitcoin recovers and retakes $7,000, it could pass the $7,300 price from the start of the year and head towards resistance at $7,600. However, if it fails at this level, traders should expect to see the world’s largest cryptocurrency fall to support $6,500.

Prior to today’s decline, BTC prices had experienced very low volatility, which is especially unusual in the cryptocurrency market. The Bollinger band spread, at one point earlier today, was just under $900 which is the lowest it has been since January 6. Analysts consider a tightening of Bollinger bands to be a sign of an impending and significant move, although it does not on its own indicate a direction for that move. With the halving event only a couple of weeks away, and opinions divided on whether this will cause an increase or decline in prices, there is the potential for a sharp move in the coming days.

Following significant drops for major markets in March, the trading community has experienced a calming of nerves, led primarily by government fiscal measures designed to minimize the loss caused by the spread of the Coronavirus. One such move, by the US government, saw 80 million checks of $1,200 handed out to the country’s citizens. The checks were meant to ensure that individuals were able to buy essentials like food. However, anecdotal evidence suggests that a significant number of people have used their checks to buy cryptocurrency. Major exchange Coinbase has said that it saw a four-fold increase in the number of accounts that had deposited $1,200, which coincided with the period that the checks were issued. According to Coindesk, Binance confirmed similar findings with their US exchange.

Many US citizens may have purchased additional cryptocurrency with their stimulus checks, but a report by The Economist shows that only 5% of people regularly use cryptocurrency. Only 7 %of respondents suggested that they knew nothing of cryptocurrencies. 33% said they don’t use them and don’t plan to. 5% reported that they use cryptocurrencies on a regular or ongoing basis. The report also showed that people in countries with developed economies were less likely to know of crypto than those in countries with undeveloped economies — 79% compared to 92%.

While Bitcoin’s decline has dragged the rest of the market down with it, with all major coins seeing a decline between Ripple’s 2.89% and Bitcoin SV’s 6.06%, one coin to have bucked this trend is Stellar. XLM prices are up 3.91% over the past 24 hours and the coin is now trading at $0.0516.

At 19:30, Bitcoin (BTC) prices were down 3.92% and the world’s largest cryptocurrency was trading at $6,930.80 while Ethereum (ETH) was changing hands at $176.03 having fallen by 3.82%. Ripple (XRP) had performed slightly better, only shedding 2.89% of its value to trade at $0.187. Bitcoin Cash (BCH) and Bitcoin SV (BSV) saw their prices fall by 5.32% and 6.06% to trade at $224.21 and $187.23 respectively.

If you have any questions and comments on Bitcoin today, use the form below to reply.

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