The roller-coaster has started a month ago, making the market wave up and down from $36,000 to $44,000. As we have mentioned several times during the last month, the $44,000 remains the first recovery point for another bullish market. From our view, the third time that the price will reach this line, it will be the final one.
This time, the profit-takers were much faster than in previous times, showing that the market was not ready for a consistent action that could bring the price to higher levels. The fear of the traditional markets still exists in the shadows of the Ukraine war so there is no extra action that could boost Bitcoin’s price.
From this point and on, we believe that fundamental analysis can contribute more to the price formation process. The last developments regarding the oil embargo from Russia in the US have made the traditional markets shrink down while the inflation is aiming for new high levels in several countries around the world.
All those factors that affect “de facto” the traditional markets and companies around the world have started to affect the crypto market also. This also happens because more and more institutional money is invested in the crypto markets. This capital allocation allows larger players to change positions in the short-term horizon and affect prices with larger leverage.
As you will find in this Bitcoin Price Analysis the derivative markets have also played an important role in that, allowing larger wallets to hedge trading positions or go on “naked” derivative trading, allowing trading volumes to grow.
The expectations, at this moment, had been on the waiting list as there are multiple events that could lead the market one way or the other. The path for breaking the $44,000 will need a steady and decisive route that could give an initiative and a story for the next bullish trend.
The moving averages crossed each other, marking a bearish signal for now. This could be misleading in that period as the consolidation could end up to consequential signals with no meaning at all.
The trading volumes have been a little higher than normal but this should be examined under the price action spectrum and how much it could be affected by that.
As you find in this Bitcoin Price Analysis the roller-coaster mode is much more evident in the short-term view as the price is trying to touch every resistance and support point in the chart. The reality is that the market will probably find a way to return on the average of this zone.
The average point for this zone remains at $40,000, a fact that could be exploited for future use if there is no other way that the market could be higher or lower from the contact points.
MACD index has been on the “red” side for the majority of the previous week, showing that the market is not strong enough to engage in more steady growth potential. This move can continue to happen in the next period but the market momentum should turn on the other side.
The RSI index moved between values 45 and 50, indicating that the market will probably remain on the same spot for now, with a slightly negative position for the next few days.
After a successful signal on early Wednesday 9th March, another signal break in the chart today. A bearish signal came out, showing that there is a vast probability, more and more corrections to happen over the next hours or during the weekend in the Bitcoin’s price.
This means that we can observe in the next hours a potential drop for the price around $800 – $1,000. The price drop could the market down to $39,000 or more, in the next 16 – 20 unless there is another breaking news story that will bring more volatility or a change in the established trend for the market.
That’s why we should always trade cryptos with some coverage or have a stop-loss order, ready for action if something outside from our analysis perspective happens. The fact that we are in front of a bearish signal doesn’t mean that the market will follow blindly the signal and expect instant profitability.
MACD index (Moving Average Convergence Divergence) accompanied the signal in the 4-hour window, showing that the market will be on the point, probably 4 hours earlier than the moving averages. This confirms the signal from a momentum perspective and shows that a consolidating market could rise opportunities to a lower level.
The RSI index (Relative Strength Index) moves up and down, without producing an actual signal. This shows that there is might be another use for this index, probably when the market has a more clear direction. We will examine it in future cases.
Bitcoin’s reaction to Biden’s announcement was bullish enough for many investors to take some profits off the market and bring it back to $40,000. The level of complexity in the market has grown massively during the last months and it means that the market turbulence will be stronger as time goes by.
The roller coaster continues to bring more attention in the short-term horizon so get prepared for more action in the upcoming periods!
Read our previous Bitcoin Price Analysises here!
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