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  • Bitcoin may get boosted amid growing fears about the global economy recession.
  • BTC/USD is hovering around a pivotal technical level.

Bitcoin jumped to a new 2020 high during early Asian hours. The first digital coin touched $9,614 level before retreating below $9,400. At the time of writing, BTC/USD is changing hands at $9,360, mostly unchanged both since the beginning of the day and on a day-to-day basis. Bitcoin’s market dominance retreated to 65.4% as some major altcoins like IOTA, Tezos and Ethereum Classic are registering double-digit gains.

Coronavirus and oil collapse may be beneficial to Bitcoin

Coronavirus and a real threat of global economy recession have already affected financial markets and created a situation of anti-risk sentiments. While Bitcoin’s safe-haven status remains debatable, many experts believe that the cryptocurrency will gain ground as investors starts to leave traditional markets and look for alternative ways to park their assets in times of geopolitical an economic uncertainty.

Thus in January, oil lost over 20% of its value amid fears of decreasing global demand as China, one of the largest energy consumers, introduced travel bans in several cities.  To soften the blow, the People’s Bank of China injected 22 billion yuans in the markets. However, this measures may not be enough to contain the panic, according to Ipek Ozkardeskaya, a senior market analyst at Swissquote Bank.

“The efforts may look like trying to counter a tsunami with shovels.”

In this situation many investors may turn to Bitcoin as it is less correlated to the global economy and cannot be inflated by governmental liquidity injections.

BTC/USD: technical picture

From the long-term point of view, BTC/USD is hovering around the pivotal level of $9,300 created by 38.2% Fibo retracement for the downside move from July 2019 high to the recent low hit on December 2019. The reversal from this area in October 2019 resulted in a new bearish wave that took the price to December lows. We will need to see a sustainable move above this area for the upside to gain traction with the next focus on the recent high of $9,600 followed by a psychological $10,000. 

On the downside, the initial support is created by psychological $9,000. It is reinforced by SMA200 daily currently at $8,890. If it is broken, then deeper decline towards 23.6% Fibo retracement at $8,250 may be expected. The next strong support si created by a confluence of SMA50 and SMA100 daily on approach to psychological $8,000. 

BTC/USD daily chart