The trader named an important resistance zone for the bitcoin price

The trader named an important resistance zone for the bitcoin price

Pavel Gromov, a practicing trader and resident, tells about the current situation on the market.

On the weekend, the price of bitcoin rose above $9000, but returned to the range of $8800-$8500. At the time of writing, the asset is trading near its lower border.

What about traditional markets?

On may 1, the stock market continued to fall, which began on the last day of April. Today, Asian markets are falling: the Chinese Hsi index, which at the time of writing lost more than 4%, is leading the fall.

Several factors are putting pressure on the markets — the decline in the us business activity index, the fall in US GDP, and the fall in consumer confidence in the US, which has reached all-time highs.

The main influence on the markets was the threat of an aggravation of the US-China economic conflict, which was manifested in the aggressive rhetoric of trump. He threatens China with responsibility for hiding information about the spread of the coronavirus and promises to break the trade deal if China does not buy US goods. 

If the decline in us markets continues today and the S&P 500 closes below 2800, this could trigger sales and a significant drop in stock markets.

On the other hand, Trump does not need a market crash, and he can fix the situation with a single tweet.

What's on the cryptocurrency market?

The price of bitcoin again tested the lower limit of the range at $8,500. While the first cryptocurrency has not returned above $8700, the test of the lower border is not finished and can be continued, especially if European markets follow the path of Asian ones.

Altcoins have fallen heavily, and bitcoin's dominance has reached its highest values in three months. Ether did not hold above 200, EOS reached lows to bitcoin, and other top altcoins also significantly declined.

The market clearly expects bitcoin to exit the $9200-$8500 range. The direction depends on the external background. Bitcoin may not fall with the S&P 500, as we have seen repeatedly in the past few weeks, but it still needs a positive in the stock markets to grow.

If the European and especially American markets stop falling, bitcoin has every chance to return above $9000 within a day. In the case of an external negative, we will most likely remain in the range of $8500-$8800 with a possible spill to $8200.

What do the charts say?

BTC continues to move in the range of $9200-$8600.4ffd93049000fd1b6c09a919dfd45a90d91520a2f92cb6b2248b98264363f379.png

At the moment, a strong resistance has formed at the level of $8765. On the 4-hour timeframe, it is also confirmed by the market profile.8bca07bcc3370cb8f0f2667ce8cd203acce25eca905c0095fa452ce2bb97e972.png If buyers are not able to return the price above this level in the near future, there will be a risk of a decline to the $8000-$8200 mark.dda246115c62f667f0cb9821f7c45412dcf499ef7d49ab105edf1b894f716468.png

On the daily timeframe, bitcoin bounced off the upper border of the descending channel. At the peak of growth, there were high sales volumes and an overall surge in volumes.444e959f3257120b392892e4e4c5ae6bd425067d27b1589082adb0fe570c848b.png

All this may indicate at least the beginning of a deeper correction. The nearest accumulation zone, from which the rapid rally started, is in the range of $6700-$7500.


The nearest local support is in the range of $8000-$8200. Since the 4-hour timeframe formed resistance at the level of $8765, the priority is to continue the decline to the level of $8000-$8200.8bca07bcc3370cb8f0f2667ce8cd203acce25eca905c0095fa452ce2bb97e972.png Canceling the downward scenario — a breakout and fixing above $8765.

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