- Bitcoin’s short-term trend has turned bearish following a drop to $6,600. Further losses could be in the offing, say chart analysts.
- The recent liquidity-driven bounce in equities could falter, too, adding to the bearish pressures for bitcoin.
- A UTC close above the 50-day average is needed to neutralize the bearish case.
Bitcoin is reporting losses on Monday, having ended last week with its longest weekly winning streak in nearly a year.
The top cryptocurrency by market value fell by $300 soon after midnight to hit a 12-day low of $6,600. Bitcoin was last seen trading near $6,693, representing a 2.5 percent decline over 24 hours, according to CoinDesk’s Bitcoin Price index (BPI).
A near 2 percent price rally seen in the seven days to April 12 had marked bitcoin’s fourth straight weekly gain. Prices rose 15.4, 1.0, and 8.8 percent in the previous three weeks, respectively. A four-week winning trend was last seen in May 2019, as seen below.
Market woes to return?
The latest four-week price rise from $5,300 to $6,900 looks pale compared to the uptick seen 11 months ago. Back then, bitcoin jumped from $5,150 to $8,730 in the four weeks to May 26, 2019.
Further, the follow-through to the latest four weeks of gains has been negative so far. The cryptocurrency is flashing red, as noted above, and may continue to lose altitude in the near term, with some observers suggesting the recent equity market rally is liquidity-driven and has potential to unravel.
As of Thursday, the S&P 500, Wall Street’s benchmark index, was up 27 percent from multi-year lows near 2,200 observed on March 23. The Federal Reserve has announced multiple easing programs worth trillions of dollars over the past few weeks to help contain the impact of the coronavirus and cushion the markets.
However, the rally could soon begin to unwind, pushing bitcoin lower. That’s because the first-quarter corporate earnings season is set to begin this week and looks likely to bring a reality check to investors…