We can already observe the first negative consequences that the global economy has received as a result of the spread of coronavirus. In particular, this negatively affected the Bitcoin exchange rate, which for several weeks in a row has maintained a downward trend.
The question arises: how low can the price of Bitcoin fall? Analyzing this situation, one of the analysts notes that Bitcoin can maintain a good position in the conditions if it does not go beyond the two lower boundaries from the current level. If the price falls below one of these boundaries, the viability of Bitcoin will likely be at risk.
Mass stock market sale
The appearance of new outbreaks of coronavirus in different parts of the world has seriously worried investors. The economic crisis is not as far as it seems since the situation in the financial market is now rather precarious. The plummeting stock markets triggered fears of recession.
The Fed rate cut could not become a “lottery ticket” for Bitcoin. Although many experts provided for this to guarantee a rapid increase in the price of Bitcoin, this did not happen.
Because of the coronavirus, panic reigns in the world market, uncertainty about the stability of the exchange rate. Many investors actively sell their stocks at a reduced cost.
Despite the “loud” collapse in the stock market in the last week, the situation with Bitcoin is not so critical. This digital currency is still relatively “holding a blow” against the backdrop of mass apathy in the financial market. The Bitcoin exchange rate fell from 10 500 US dollars to 8 400 US dollars.
Despite the decline in the cost of Bitcoin, the analyst sees a good perspective for him. He believes that having two lower boundaries will protect Bitcoin from a devastating fall.
For which two lower lines should Bitcoin fall?
Bitcoin’s two-year moving average acts as one of the lower bordering lines. In 2019, this indicator was 7300 US dollars. The analyst notes that Bitcoin in its history has never dropped below this level.
The second bottom line is a measure of the logarithmic regression curve. This figure is 7400 US dollars. There was a period when the price of Bitcoin fell sharply below this indicator by 9%. But even in this case, Bitcoin showed its viability: soon the price of BTC rapidly increased.
If the Bitcoin rate falls below the logarithmic regression curve, this can cause a loss of user interest in this digital currency.
The recession of digital assets is a kind of test for the strength and viability of Bitcoin. Can the most sought-after digital currency hold its ground or will it fail? It will show time.
This article is intended as a news item to inform our readers of various events and developments that affect, or that might in the future affect, the value of the cryptocurrency described above. The information contained herein is not intended to provide, and it does not provide, sufficient information to form the basis for an investment decision, and you should not rely on this information for that purpose.