Compared to what happened a few days ago, the price of Bitcoin is being traded more consistently between $ 5,045 and $ 5,641. Although Bitcoin dropped by more than 50.8% on March 12, it managed to regain 37.5% to trade at $ 5,200.
Many in the cryptocurrency space are still trying to piece together an explanation of the carnage over the past week, and the closure of the stock market over the weekend seems to alleviate some of the virus's fears. corona, this has had a positive impact on the cryptocurrency market at the moment.
Some traders and analysts continue to point out the reasons for accusations at BitMEX, arguing that the exchange was playing badly to make the drop more catastrophic.
Daily BTC / USDT chart | Source: TradingView
At the time of writing, Bitcoin is forming a neutral Doji on the daily time frame, indicating that traders are still uncertain about the direction of the price for the next few days.
Referring to other indicators will give us a better picture of the current price trend, and a glance at the relative strength index (RSI) shows that this indicator is being flattened in oversold area.
BTC / USDT chart with 4-hour frame | Source: TradingView
On the shorter time frame, the 4-hour frame, traders can see that the RSI remains unchanged as the buying and selling volumes have decreased and Bitcoin is trading in a tight range from $ 5,021 to $ 5,517.
Some traders argue that the short-term time frame is supporting Bitcoin's downtrend as 4-hour candles are forming lower highs. However, the Stochastic and RSI are increasing and the MACD chart shows an increase in positive momentum.
The inverse relationship between price and indicators is creating a bullish divergence in the short term, which could be a positive sign that helps the price increase. The reduced trading volume and the tightening of the Bollinger Band indicator can create a strong price movement before the weekly candle closes.
Currently, the price is holding below $ 5,500 where the VPVR indicator is showing high volume buttons formed at $ 5,200 and $ 4,850, so these two levels can provide support for Bitcoin. in short term. If the bulls can push the Bitcoin price above $ 5,500 then a rally to $ 7,650 is possible. However, this also depends on the maintenance of trading volume and the confidence of traders that the Bitcoin price has bottomed out at $ 3,770.
The current price action shows that traders are taking profits when prices reach the top of the range instead of opening long positions and buying above breakouts.
Price increase scenario for Bitcoin
BTC / USDT chart with 4-hour frame | Source: TradingView
If the price can break through the overhead resistance of $ 5,500 and reclaim the old support at $ 6,300 to $ 6,400, this will be an encouraging step. As mentioned earlier, with the brilliance of the short-term indicators, and the VPVR indicator creating a low volume gap from $ 5,500 to $ 7,650 can help Bitcoin easily skyrocket, if it does. driven by a high volume of transactions.
Such a move will help the price return to trade within the $ 7,750 range, the level at which Bitcoin traded last week.
Discount script
Daily BTC / USDT chart | Source: TradingView
As shown in the daily time frame, losing support of $ 5,200 will make the trend more on the bears' side, although Bitcoin's price has risen higher as the price dropped to $ 3,770 on March 13.
So far, all eyes are probably heading to $ 3,769, which is the price that blocked Bitcoin's storm in the past week. Below this level, Bitcoin's price appears to be forming a double bottom at $ 3,384 and $ 3,177.
Although the external factors do not affect the blockchain field much, the price of Bitcoin is different, because the financial crisis created by the COVID-19 pandemic is seriously affecting it. As the situation gets worse, investors expect the market to worsen and as a result, they will sell all their assets to hold cash.
However, in the coming weeks, we will see a series of multilateral stimulus packages given by different governments, so that the stock market may rebound, and investor sentiment. for risky assets, commodities and stocks will improve.
Until then, it is unwise for traders to choose to wait for the market to bottom out, or to play only in certain price ranges, and to cash out when prices are outside this price range.
Obviously, some Bitcoin investors will recommend that people take long positions and accumulate wealth. However, with the current global economic uncertainty, perhaps it is better for people with limited capital to take a break to maintain their daily lives, and return when the market becomes more stable. .
You can see the price of BTC here.
Disclaimer: This is not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
SN_Nour
According to Cointelegraph
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