Monday was a painful day for both cryptocurrency and stock investors, as the prices took a tumble at almost exactly the same time. The good news is that both recovered quickly, likely buoyed by news of a $1 trillion infrastructure investment boost in the US. The bad news is that it seems any rumours of a decoupling were unfounded, and we once again find ourselves avidly watching stock market movements.
The dip itself may have been fuelled by any number of factors, in particular a resurgence of COVID-19 across China and the US. However, it must also be seen in light of the recent “rally” across all markets, and many have highlighted that a pullback was long overdue.
Price Analysis
Price analysis as of 12:00 GMT +1 16/06/2020
It was a relatively volatile week for Bitcoin – at least in comparison with recent weeks. Despite this, we find Bitcoin trading where we left off last Wednesday, right back in the $9,400-$9,600 zone.
The Bitcoin price briefly fell below the support area we’ve been looking at lately, but has since returned. Bulls will now want BTC to hold the uptrend that has been forming throughout May, with higher lows. This is still not invalidated and could lead to a new push towards the yearly high. On the downside, there is strong support at $8,400 should the bears have their way.
Fear and Greed back
The Fear & Greed Index dropped back down in the “fear” zone last week, as the BTC price took a solid hit. The Index is now at 37, the lowest we’ve seen since 30 April.
The 7-day average real trading volume has continued to decrease lately. We have seen some spikes in volume, but these have been related to the BTC price falling. A falling price that gets supported by strong volume is normally a bearish signal.
Reasons to be cheerful
The halving of the block subsidy on 11 May led to a sharp decline in the hashrate on the Bitcoin Network. But the tide is turning, and the hashrate has now returned to the pre-halving levels seen in the first two weeks of June.
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