Bitcoin is struggling to hold onto gains following a prolonged bout of selling, but at least one measure shows that a rally is possible going forward.
Based on the DVAN Buying and Selling Pressure Gauge, Bitcoin jumped above a crucial level of resistance, triggering a positive divergence and a buy signal. A similar trend played out in January ahead of Bitcoin's surge past $10,000.
"The potential for downward moves remains in these next two weeks, depending on what new health and economic data shows. But the long-term case for crypto has been made stronger by the impacts of this pandemic," said Richard Rosenblum, co-head of trading at crypto market-maker GSR. "As the dust settles, people will begin to look for a store of value."
Bitcoin rose as much as 4.4% to $7,048 in New York on Friday, while the Bloomberg Galaxy Crypto Index, which tracks some of the largest digital assets, gained as much as 4%.
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Investors are rushing out of riskier assets amid the coronavirus pandemic that's cast a shadow on global growth prospects, with Bitcoin losing about 25% in March. That was its worst month since November 2018.
"Cryptocurrencies, especially Bitcoin, were supposed to offer a safe-haven against traditional assets and currencies," said Nicholas Cawley, senior market analyst at "But they have failed, and badly."
Bloomberg tickers: '%XBT'/
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