Following the news of the outbreak of the coronavirus in the UK, analysts believe that fear may return to the markets, and bitcoin is no exception.
To Report The Bitcoin Telegraph, the price of bitcoin, has performed very well in recent months, reaching a new high of around $ 24,000. Yesterday, at the same time as the stock markets fell, the price of bitcoin also fell by 6%. On the other hand, the dollar index also rose yesterday. Each bitcoin is currently traded at a price of 22,700.
Many believe that the prevalence of the coronavirus mutant in the UK and the subsequent strict quarantines have had a significant impact on various markets around the world. Some compare the current situation with the situation in March.
In the 4-hour timeframe, we see a downward divergence. This could justify a drop in prices from $ 24,000 to $ 22,000.
If we go back a little and look at the current correction in the 3-month timeframe, we find that in both uptrends and downtrends, such a correction is normal; For this reason, experienced traders are not so surprised by these events.
The chart above shows the key areas, but to confirm the downward divergence, the price of bitcoin should not break its previous resistance.
If the $ 23,400 and $ 23,600 resistances do not break, there is a possibility of further fall and lower support. On the other hand, if $ 23,400 and $ 23,600 are broken, one can expect a new price peak in the last days of the year.
$ 18,500 area
The $ 18,500 area is the most important price range. In the previous uptrend, this area was very important and acted as an important price stabilization area.
In the daily time frame alone, we saw the formation of a higher floor at $ 17,500; In other words, the price of bitcoin must remain above the daily time frame in this area to maintain its uptrend.
In the weekly chart, if we see a fall to $ 12,000, it will still be considered an uptrend; However, such a correction is much larger than a normal correction of 20 to 40 percent. It should not be forgotten that a 50% correction will not necessarily eliminate the market uptrend, but will give you a great opportunity to buy on the floor.
Growth of the dollar index
Yesterday we saw the strengthening of the dollar index, which was formed due to the uncertainty in the global markets.
As investors’ market uncertainty and crises escalate, investors seek safe haven for their investments, the dollar index jumps in the short term. This was also seen in the fall of March. At that time, the Federal Reserve, with the supply of large volumes of currency, caused the dollar index to rise significantly.
The market value of digital currencies failed to break its historical peak, and this can be considered a sign of reform.
In many cases, looking at a market value chart is more beneficial than looking at a bitcoin chart alone. Based on this chart, it can be said that the price of Bitcoin is likely to fall to $ 18,500. Of course, in order for this decline not to continue, it is very important to maintain this support in the short term.
Altcoins may also benefit from Bitcoin’s uptrend. If bitcoins can stabilize above $ 18,500, altcoins could also rise significantly. By then, the fear and uncertainty of the coronavirus is expected to cast a shadow over financial markets.