The cryptocurrency market played out well on March 19 amid the market crash, with Bitcoin (BTC) surging by almost 15% to climb back above the $6k price level, followed by several altcoins.
Despite the recent Bitcoin performance, however, Rob Sluymer, a technical strategist at Fundstrat Global Advisors LLC argued in a Bloomberg report on Friday that the leading cryptocurrency might take a couple of months to recover completely.
Sluymer explained that the market crash had left Bitcoin’s technicals in rough shape, with the price action “badly compromised.” Not just Bitcoin, major assets from stocks to bonds and currencies fluctuated severely, due to the Coronavirus pandemic.
Bitcoin, which is seen as the largest cryptocurrency had significantly dropped in price around March 12 and 13, losing at least $3,000 in about 16 hours. It now trades about 40% below its mid-February high.
“The crypto breakdown over the past week mirrored the ‘get me out of everything’ panic that dominated all asset classes, whether they were defensive (bonds and gold) or not (equities),” Sluymer added.
Amid the struggles with the general financial markets, Bitcoin has made its way above its 200-week average, which Sluymer said is an essential long-term structural support level for most asset classes.
“For now, technically we will again give Bitcoin the benefit of the doubt that it is attempting to bottom but recognize Bitcoin will likely need months of consolidation to repair the technical damage now in place,” he said.
Vijay Ayyar, Singapore-based head of business development at Luno added in the report that as the industry nears Bitcoin Halving, the price could reach $6,500 again before finding a range between $3,000 and $6,000 until we enter another bull-cycle.
“This is classic redistribution and would be very healthy for future Bitcoin price action and if we were to have bullish momentum going forward,” Ayyar said.
Meanwhile, despite the recent dip, Bitcoin is still up over 25% on the yearly chart, and according to market observers could be decoupling from the rest of the financial market.