Will Bitcoin resist the coronavirus crisis? It was assumed that it could be a safe haven asset, but at the first real test it seems to be in difficulty: nobody buys because liquidity is invested elsewhere, demonstrating the lack of confidence in this asset.

For Bitcoin owners, this period must be one of the strangest to deal with because the market is practically suspended around the $ 7,000 area, an area where it has been present for a couple of weeks. As the world faces the coronavirus pandemic crisis, markets are rallying and the price of oil has collapsed, BTC has almost stopped.

On the one hand we can talk about stability, an element for which Bitcoin is not necessarily known: in this last difficult period the cryptocurrency has been more stable than all the other assets, including gold. However, the problem lies in the fact that there are not many movements in the Bitcoin market. In other words, we should see many purchases of Bitcoin, instead there are very few of them.

Why are there no Bitcoin purchases? The crisis pushes towards other solutions

It is almost as if the market is simply waiting in an attempt to figure out what to do. One of the current problems of BTC, and of the whole cryptocurrency market, is that most of the people concerned have perhaps already purchased it. Institutions and large investors need to enter to increase the volume of trade, although cryptocurrency was originally thought to be a way around this manipulation. Institutions currently have many problems in other markets, especially in the energy sector; instead, large investors liquidate positions to invest in sectors that are expected to gain during the coronavirus crisis and after.

In theory it would be difficult to imagine a more bullish scenario for an alternative currency, but there is no one who buys it; for this reason, there is a suspicion that Bitcoin will not pass this test, precisely because small and large investors will have to increase liquidity to cover losses and / or invest in other sectors.

Bitcoin forecast: $ 6500 level of attention

I am not overly bearish on Bitcoin, but we are in a scenario in which we will see “bear markets that overturn”: the markets that have performed well will also be affected by the crisis, because operators will have to cover losses in the stock market, for example.

The volume at the bottom of the graph is simply set sideways to exceptionally low levels. The exponential 50-day moving average at the higher levels will cause a significant amount of resistance, but if we drop below the 6500 level, this market will drop further.