*OspreyFX would like to state that traders should research extensively before following any information given hereby. Please read our Risk Disclosure for more information.
Positive month for BTC/USD
- Upward month for BTC/USD as it looks forward to reaching the $10,000 milestone
- Coronavirus and World Economic Forum (WEF) helped boost the cryptocurrency
January is coming to an end, and it has been pretty positive for the “king of cryptocurrency”, Bitcoin, across the board. A bullish channel was established before this, since the lows of the aforementioned month. The price action is consolidating above the $9,000 handle.
The crypto sphere has witnessed some impetus to the upside due to the risk-off sentiment in the financial markets. The outbreak of coronavirus around the world was the source of this impetus.
Subscribe to our newsletter to receive our weekly updates + more straight to your inbox!
Coronavirus and WEF helped to boost Bitcoin demand
The flight to safety button has been triggered, and assets like BTC got a boost in demand for the short and mid-term. Headlines coming from the WEF held in Davos last week also helped to put the cryptocurrencies in focus. This gathered interest from key players in the markets.
Some voices were in favour of the blockchain technology, supporting the crypto sphere’s moves in the last few days. Moving on, Bitcoin is now breaking a key resistance area at $9,351.89. Momentum was gathered to rally towards the $9,675.10 level. Once it breaks above that area, the focus will shift towards the $10,000 barrier as the next tough nut to crack. If it goes beyond that region, the BTC/USD pair can do a leg higher to test the $10,430.97 level in the short term, at least.
Such a hypothesis is being supported by the current position of the price with the 50 and 200 SMA at the H4 chart.
Will BTC challenge the 200 SMA?
To the downside, a pullback could happen at the current stage. This tests the support area at $8,325.46, which coincides with the 200 SMA. If it gives up, then a leg lower could take place towards the $7,377.97, challenging a key barrier that helped to cap gains during December 2019. Technical oscillators are hovering within the extreme territory. RSI is consolidating its slope around the 70 level, while Momentum is moving above the 800 region.
*OspreyFX would like to state that traders should research extensively before following any information given hereby. Please read our Risk Disclosure for more information.