The Bitcoin market experienced another negative move during the weekend, slipping down to $38,000. This move showed that the market will continue to move in the consolidation zone between $35,000 and $40,000, without being able to give a decisive blow into the price formation system.
The fact that there is no major trend at this moment in the Bitcoin market, makes more and more investors anticipate a new bullish era when the previous high levels will be broken and a new high level will be established.
As we have mentioned in previous articles, the key zones for the next recovery lay at $44,000 and between $47,000 – $48,000. Those two zones will enable the market to consolidate more power and momentum and deliver better results in the short-term future.
As we are finishing the second month of the consolidation period below $40,000, we might expect a breakout move, way more successful than previous breakouts that reached $44,000 but didn’t have the momentum to sustain a bullish outlook.
The expectations in the previous Bitcoin Price Analysis have been on the bullish side as more and more news from the Russian invasion in Ukraine came in. The last one was that Ukraine is using Bitcoin to buy new weaponry and defense systems. This could spark a mid-term jump in the Bitcoin price but also increase the number of Bitcoins on the move, which is a positive signal for the overall market situation.
The trading volumes have been sustained at normal levels, indicating that there is a need for a more major trend to increase positions in the market.
The moving averages crossed each other, forming a bullish signal, which was not confirmed in the next days. This should show us that the market in ranging mode should not be trusted, especially for mid-term signals.
In the short-term window of this Bitcoin Price Analysis, we can observe that the Bitcoin price returned to $38,000 in just a week. The reality is that the uptrend to $44,000 lasted for a single day and it was enough to make the market believe that we might have ended with the consolidation zone.
But the time showed that there is a need for something stronger to bring the new bullish era in the Bitcoin market. Looking at the ups and downs, we suspect that this trend could be repeated in the next few days if there is another uptrend in the Bitcoin market.
The resistance level at $40,000 remains the main barrier that should be overcome every time. Until there is a strong move that will bring the price above that level, the correction will always remain below that point. The geopolitical news during the next days will show us how the price will be affected and where it will go.
MACD index (Moving Average Convergence Divergence) passed again on the “red” side, showing that the uptrend at $44,000 wasn’t meant to stand for long. The negative momentum will affect the price formation if the trend continues to be on the ranging mode.
The RSI index (Relative Strength Index) moved between values 40 and 45, showing that the Bitcoin market will probably remain on the same price zones but with more injected negativity in the next periods. The expectations could drive the price down to $36,000 if there is no positive force in the market to halt it.
Since the last trading signal on March 4th, the bears have taken over the day trading window and led the Bitcoin price almost 8 % down since the signal. Today, we can analyze another strategy that we could implement in the day-trading window.
As we can see from back-testing, there are 4 out of 6 cases that the moving averages will end up in a confirmed position, either on the bullish or the bearish side. This means that there is still an advantage of successful signals in the day trading window.
The least achieved return for every successful trade after a signal is 2 – 3 % in 8 – 10 hours after that. Having a “Take Profit” option in your trading platform could be useful as it will ensure that you will take any profitable action in the market.
A “Stop-Loss” action would also be needed as the market moves immediately towards the preferred direction. A “Stop-Loss” order could be placed around 1 % below the initial move. This will save any directed move that can bring the market into an unpleasant position.
In this Bitcoin Price Analysis we should also indicate that the market is ranging at this moment, which can give more signals in this process and their accuracy could be better than during a clear bullish or bearish trend.
MACD index has been on the “Red” side for the last few days but it remains close to the zero line. This means that a bullish signal could occur anytime soon and deliver more and more volatility in the short-term framework
The RSI index has been on the lower side, predicting an uptrend move in the next few days. We should follow this index comparatively with the rest of our analysis as it could give the “spark” needed for the new change in the trend.
Bitcoin has returned to $38,000, indicating that the market will remain between $35,000 and $40,000. This consolidation will enable Bitcoin to bring more power for the next period and deliver better results for investors.
We hope that this week will deliver more in terms of price action and we should always be looking in the Ukraine front for any developments.
Read our previous Bitcoin Price Analysises here!
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