Bitcoin is on the brink of a major correction this weekend after suffering an 18% slide over the past 15 days.
With it now trading below the daily 200 moving average downside price targets at both $8,450 and $7,830 have emerged.
The $7,830 level of support is intriguing as it is in confluence with the diagonal trendline dating back to the start of 2019 when Bitcoin was worth just $3,350.
A potential breakdown from that level would see Bitcoin trade outside the trendline for the first time in more than a year – a clear indicator of a bear market.
However, it’s worth noting that Bitcoin has enjoyed a fruitful year to date with it still being 27% up since January 1.
As a result, several analysts remain bullish on Bitcoin and cryptocurrencies especially in light of recent turmoil in traditional markets.
Bitcoin is often described as ‘digital gold’, with gold being a common hedge to global equity markets.
As coronavirus sweeps across the globe at an alarming rate, economic instability is to be expected, and could well drive the price of Bitcoin to the upside.
Another point from a bullish perspective is that Bitcoin will undergo a block reward halving in May – an event that has historically been kind to cryptocurrency due to a reduction in supply.
Both bullish scenarios are based on macro time-frames, whereas immediate price action is signalling a move to the downside.
As previously noted, the key levels of support to monitor are $8,450 and $7,830, while a break above $8,830 would indicate a move back into the $9,000 region.