Bitcoin (BTC) is looking buoyant Monday despite renewed risk aversion in traditional markets.

The top cryptocurrency by market value picked up bids near $5,850 during the Asian trading hours and rose around $500 to $6,344 at 07:14 UTC. At press time, the global average price, as calculated by CoinDesk’s Bitcoin Price Index, was at $6,290, up 7 percent on the day.

Bitcoin found takers even though stocks in Asia dipped alongside losses in S&P 500 futures, possibly over renewed fears of a prolonged coronavirus-led lockdown across the globe.

President Donald Trump abruptly abandoned his talk of life returning to normal in some parts of the U.S. by Easter and instead extended social distancing rules through April. That forced markets to price in the possibility of a deeper economic slowdown in the world’s largest economy.

See also: US Cash in Circulation Sees Biggest Increase Since the Y2K Bug Panic, Fed Reserve Data Indicates

European equity markets are also trading in the red at press time, with the U.K.’s FTSE 100 and France’s CAC index reporting 0.5 percent declines.

Bitcoin decoupling?

Bitcoin putting in a positive performance as stocks suffer may bring cheer to investors and analysts who believe the cryptocurrency is a safe haven asset like gold.

However, it’s still too early to say the cryptocurrency has now decoupled from equities. After all, the 90-day correlation between bitcoin’s price and the S&P 500 rose to 0.52 earlier this month, the highest level on record, according to Arcane Research.

Further, with the virus outbreak showing no signs of slowing down, investors may continue to hold cash (U.S. dollar). Analysts at Goldman Sachs believe the economic fallout in the west has only just begun. Meanwhile, central banks and governments across the globe look to have run out of ammo, having already fired their big “bazookas” over the last couple of weeks.

As a result, another liquidity crisis, similar to the one seen a few weeks ago, cannot be ruled out. In that case, bitcoin could again feel the pull of gravity alongside the sell-off in stocks.

Some analysts, however, think bitcoin could soon decouple from the traditional markets as macro traders and institutions have already cashed out their cryptocurrency stashes. “We think the correlation to traditional markets will ease now that most cross-asset-class investors have sold out,” Richard Galvin, CEO of Digital Assets Capital Management, tweeted Monday.

Derivatives markets data does show institutions have likely exited the market. Open interest in bitcoin futures listed across the globe has declined by nearly 50 percent from highs above $5 billion seen in mid-February.

Galvin added that the “highly stimulatory and potentially inflationary central bank and sovereign response” could only bode well for bitcoin.

Meanwhile, Jehan Chu, co-founder and managing partner at Kenetic Capital, said the Federal Reserve’s “All You Can Eat” quantitative easing plan should prevent future flight from bitcoin as we saw earlier this month.

See also: Investors in Polychain Capital’s Crypto Hedge Fund Saw 1,332% Gains – If They Stomached the Dips

The Fed announced an unlimited asset purchase plan last Monday to contain the economic fallout from the virus outbreak. Meanwhile, the U.S. Congress approved a $2 trillion fiscal stimulus plan on Friday that was promptly signed into law by President Trump.

“Barring any further cataclysmic shocks to the economy, I expect BTC will rally faster and harder than public markets,” Chu told CoinDesk.

What do the charts say?

The immediate bias remains bearish despite the price bounce from $5,850 to $6,350, as a rising channel breakdown confirmed on Friday is still valid, as seen below.

4-hour chart
btc-4h-8

A convincing move above the horizontal resistance line of $6,342 is needed to invalidate the breakdown and open the doors for a re-test of resistance at $7,000.

Weekly chart
download-2-38

Bitcoin failed to close above the former support-turned-resistance of $6,425 last week.

The bull’s failure at the key hurdle, coupled with consecutive weekly candles with long upper shadows pointing to “sell on rise” mentality, indicates the path of least resistance is to the downside.

Bitcoin would likely slide back toward $5,000 if the buyers fail to defend the Asian session low of $5,850.

The outlook as per the weekly chart would turn bullish if and when prices find acceptance above $7,000.

Disclosure: The author holds no cryptocurrency at the time of writing.

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