Cryptocurrency Market Update: Bitcoin stays above 50-day SMA as oil prices tumble

• Oil markets see a massive drop as Bitcoin and the stock market retreat slightly from the highs on Monday.
• Bitcoin holds onto the interim support at the 50-day SMA but only a surge above $7,000 will avert possible declines to $6,000.

Bitcoin price retreated from levels above $7,000 on Monday as investors across the world watched in shock as oil prices tumbled into the negative for the first time in history. BTC/USD extended the bearish action to $6,748 before entering into a reversal that is currently above $6,800.

Bitcoin and oil have no correlation and the slide on Monday is likely to have been an impact of the moment. However, Bitcoin’s correlation with the stock market has continued to grow. The correlation was brought to light by the crash in mid-March affecting Bitcoin, other cryptocurrencies and stocks following the Coronavirus outbreak.

 The fall in prices of Monday was felt not only in the oil markets but also in the stock market. Dow Jones Industrial Average retreated 4% to 23,650. At the same time, S&P 500 and Nasdaq dived by 1.8% and 1% in that order.

Bitcoin finds interim support

At the time of writing Bitcoin is trading at $6,869 after accruing a subtle 0.47% in gains on the day. The intraday trend is bullish but volatility is shrinking. This means that price action to the north would continue to be limited. Meanwhile, on the downside, Bitcoin appears to have found support above the 50-day SMA.

BTC/USD daily chart

If the reversal fails to rise above $7,000 in the near term, Bitcoin could easily fall back in the hands of the bears. Moreover, a similar ascending channel to the one before the breakdown in mid-March is in place. In the event the channel support caves then BTC is likely to spiral towards $6,000 as discussed in an earlier published analysis.

Quote of the day: Frank Chapporra, a former reporter at Nasdaq

People say Bitcoin is wild. Throughout this [coronavirus] crisis, we’ve seen spine-tingling equity volatility, Treasury yields hit record lows, oil prices fall below zero, unprecedented Fed printing and bond purchasing. Right now, Bitcoin might be more stable than anything else.