The first quarter was the worst one in bitcoin’s history. And the start of Q2 doesn’t look promising either, though it may turn out better down the road. After yesterday’s corrective rebound, the digital currency failed to secure its gains and slides again. The price faced resistance around $7,500 and is losing the $7,000 threshold on Wednesday, -4.55% on the day.
The recent short-term rally was fueled by reports that Japanese online brokerage firm Monex is considering buying Coincheck, the exchange which suffered a high-profile hack early this year. This gave some confidence to market participants as Monex is a regulated public company, and this takeover may raise chances for mainstream digital currency adoption. However, this boost wasn’t enough for a sustained recovery and the virtual currency had to resume the descent.
It looks like the market participants now tend to sell bitcoin on rallies, fearing new negative shocks in the volatile market. On the other hand, as long as the price remains above the early-February lows of $5,800, the bullish potential remains. Therefore, the cryptocurrency may continue its consolidation within the familiar range in the short-term until more significant drivers pull the price out of this channel. Daily close below the $7,000 mark will darken the short-term technical outlook for BTCUSD.
By Helen Rush
Senior Analyst at Capital Markets