Technical Analysis of the Bitcoin

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The formation of a bottom after a long bear market is not a linear process. At various intervals, we will probably see tides of purchases and sales, while bulls and bears are trying to establish their dominance. After the intelligent recovery from the low values ​​when the bears seemed to surrender, the fall of February 24th, which wiped out about $ 15 billion of the total market capitalization within a few minutes.

Such a wave of sales is not always based on fundamental news or events. Technical factors such as ensuring profit close to solid resistance and the initiation of short positions of aggressive bears can lead to such a sharp downturn. Although we expect instability in the bottom-up process, we continue to focus on positive fundamental events. The longer markets neglect the basic principles, the stronger the breakthrough.

After Venezuela, Russia is now planning to release the oil-backed crypto-currency. OPEC and Russia are exploring options for settling their energy deals in crypto instead of petrodollars. If this happens, it will give a big boost to the crypto markets. When a head of state approves the block technology and recommends it to leaders of other nations, it shows that the time of this technology has come.

The BTC recovery, which began at $ 3,355, failed to overcome the $ 4,255 resistances. The bears started on Feb. 25 and pushed the price back to the 20-day exponential moving average (EMA). The downward trend line that previously acted as solid resistance now has to function as strong support.

If the price bounces off the current levels, the bulls will again try to break through at $ 4,255. If they succeed, it will show the formation of a double bottom, the goal of which is $ 5,273.91. Traders can protect their long positions with a loss of just under $ 3,236.09.

Contrary to our assumption, if bears hit the BTC / USD pair below the bearish trend line, the price could be adjusted again to $ 3,355. If support fails to stay, the next downward level of support is $ 3,236.09 below which the downturn will resume.

The moving averages are flat and the relative strength index (RSI) is close to the center point to consolidation in the near future. Price action over the next few days will give us a better idea of ​​whether the lower levels are part of the supply, or it's just a shake-up from the "weaker hands."

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Screenshots from : tradingview.com