Investing.com – After struggling above $30,000 on Thursday and most of Friday, bitcoin stalled last night, hitting a low of $28,713 and trading just above $29,000 this Saturday morning.
Bitcoin appears to have been affected by volatility in the US markets as it briefly moved into bear market territory, dropping more than 20% from its January high, though it eventually ended the session at the end of the day. Against all odds, this week the S&P 500 declined for the seventh consecutive week.
However, now more and more analysts are expecting the market bottom to be near or exceeded and hence selling pressure on stocks will ease off, which could benefit cryptocurrencies in the short term. It has indeed shown a strong correlation with stock market indices since the beginning of the year.
However, graphically, Bitcoin’s profile remains rather bearish. The hourly chart clearly shows a downward trend line since May 10th. Also, Bitcoin’s failure to hold above $30,000 is a negative signal in itself.
However, it should be noted that Friday’s fall was stopped by the $28,600/700 support, thus confirming its importance. Below the $28,000 psychological threshold would be the next potential support ahead of the May 12 low of $26,600.
It will then be difficult to find proven support up to the basic psychological threshold of $20,000. On the other hand, the $30,000 and $31,000 psychological thresholds are the first resistances to take into account, but only a pullback above $32,500 will allow us to start considering a sustained bullish reversal for Bitcoin.