We discussed yesterday the prospects of salvaging Bitcoin’s (BTC) multi-year market structure, and today, that prospect has not yet been lost. The leading crypto has taken a cautious first step overnight at making a serious leg up; but in a rapidly destabilizing global economy, there is no reason to presume that Bitcoin will ultimately maintain these levels.

We start on the 4-hour, and see that a bull divergence on the RSI has translated into a position above the 8 EMA that is holding for now. We need to see this hold, and take the 21 EMA as well, if we are going to see $5,600 survive for the week.

Need the 21 emaBTC chart by TradingView

The histogram here is showing some decent strength, but again, we need to see that bullish contraction continues. From here, it doesn’t look like $5.6k is off the table; and as we see below, this is an uber-critical level.

On the weekly, we see that the 200-week SMA is at risk of being lost for good. The 200 week has basically never been lost in Bitcoin’s history, only being marginally closed-under a couple of times in 2015 – and not even as much as it did last week.

Risk of losing it allBTC chart by TradingView

If we do not see this level retaken at week’s end, there is a pretty good chance that Bitcoin will take another huge leg down into the $3,000 range where the next volume gap lies.

Finally, the coincidence of Bitcoin’s price action with traditional markets now seems irrefutable. Many speculate that Bitcoin will, at some point, ‘decouple’ from those markets. But if we look at a comparison to the S&P500, DJI, and precious metals, we see that this doesn’t seem to be happening yet.

Correlated (for now?)BTC chart by TradingView

The markets are definitely still coupled, and so far the only difference is one of degree rather than of kind. We will keep an eye on this new front in Bitcoin watching, since we may be witnessing Bitcoin’s first experience within an economic crisis.

The views and opinions expressed here do not reflect those of CryptoGlobe.com and do not constitute financial advice. Always do your own research.

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