The Bitcoin bear (BTC) rebelled once again, causing the price to drop nearly 10% on the evening of the weekend (March 8) when the trading volume was low.
So, is the pre-halving rally over? Or has it just begun?
Prospects on the 4-hour chart
Bitcoin exited a worrying downtrend channel on March 5. However, in the last hour – after testing the support line of this channel many times, the price has now broken back down the channel after only 3 days.
This leaves Bitcoin facing two very realistic downside prospects of $ 8,100 and $ 7,500 in the short term. The first resistance on the upside is $ 8,700, then $ 10,500 and $ 11,050 respectively.
However, many will have to ask themselves the possibility of such price action over the weekend, and the coming week may witness a horrific increase, similar to the strong action we have taken. seen on October 25, 2019, when Bitcoin price increased from $ 7,400 to $ 10,500.
But what are the leading indicators telling us?
Relative power indicator (RSI)
The relative strength indicator (RSI) on the 4-hour chart shows that there is still some room left for the price to drop to the index above 31. This indicates that Bitcoin is approaching an oversold area above the time frame. This important space, and historically it must break below 30 before witnessing a reversal.
However, the hourly candle looks overbought – approaching 18.62, which is getting close to what we've seen since February 15.
Many expect to see a reversal at this stage. However, despite the RSI turning point on this day, the price of Bitcoin did not and continued to decline from $ 9,700 to $ 8,400 over a two-week period.
But what does the Moving Average Convergence Average (MACD) show us?
The MACD is heading towards a cross over on the weekly chart
As mentioned many times before, the weekly indicator is a great indicator when looking to identify an up or down trend. However, I expressed anxiety in January that the weekly MACD is showing signs similar to the bull trap we saw around August-September 2018.
During this period, the bulls were lured into a false sense of security – which saw the Bitcoin price drop from $ 8,000 to $ 4,000 in a matter of weeks, and it seemed like my concern could become a reality.
However, by the end of 2018 there was no imminent Bitcoin halving as it is currently. But then again, there was no global pandemic. However, I have yet to see any major correlation between corona virus (COVID-19) and Bitcoin price, so I will not delve into the analysis in that direction.
Next week we will have some answers because we have two historical bullish indices ahead, and if these two cannot push Bitcoin prices up next week, then maybe we should start accepting The reality of the global potential decline has a very bad effect on Bitcoin price.
Blank space CME
I've talked about it countless times, if you don't trade CME gaps, “do you even have cryptocurrencies?” The CME gaps occur when the CME exchange closes trading on Friday night and reopens on Monday after major weekend moves, thereby leaving a gap on the chart.
There are many theories as to why gaps are filled. One is that the remaining orders on the book from last Friday have yet to be executed, in which case, orders that sell Bitcoin at $ 9,165 need to be filled by buyers in the chart.
But if the market opened at $ 8,100, who would buy it higher than $ 9,165? It is likely that someone has a Long position on the margin, that is the profit from a Long guaranteed person. And in such a volatile market, is it not surprising that history shows that 90% of the CME gap for Bitcoin will be filled?
However, this is not the only bullish indicator, there is another reliable indicator, and that is the difficulty to exploit.
Mining difficulty is set to explode next week
Next week, the mining difficulty is set to increase by nearly 8% and that is the strongest increase in the whole year. In fact, it has risen the most in the last 6 months, so this is a very positive sign for Bitcoin.
In early 2020, the difficulty of mining Bitcoin increased every two weeks from 4% to 7% and after that, the price of Bitcoin increased accordingly; and usually this happens on the same day that mining difficulty sees an increase.
If this happens next week, Bitcoin may see a huge reversal, but only time will tell.
BTC price outlook in the coming week (i.e. this week in Vietnam time)
Next week with Bitcoin is quite important for many reasons. Right now, with panic around the globe, there's a lot of unreasonable behavior (for example, how many toilet paper did you buy this week?)
When such technical analysis can be completely useless, and it is a very real fact that people should consider next week. If the CME gap and the increasing difficulty of BTC mining make no impact, we can see Bitcoin drop to $ 4,000 as I mentioned above.
Regarding the resistance this week, Bitcoin first needs to reclaim $ 8,700 and turn this level into support once again, from which to exit the current descending channel. The next resistance is $ 9,200 and the next is $ 10,500 when the major levels are broken, the last resistance before putting the price to “the moon” will be $ 11,050.
On the other hand, two levels of $ 8,100 and $ 7,500 are the two levels where Bitcoin will likely find support, but if the price fails to sustain $ 7,500, that will open the way for the price to drop to $ 4,000 again as a possible scenario. out.
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Disclaimer: This article is an analysis by cryptocurrency analyst Keith Wareing – a frequent contributor to CoinTelegraph. Readers should only consult, not consider this as an investment advice, especially from Toiyeubitcoin, we will not be responsible for your investment.
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According to CoinTelegraph
Translated by ToiYeuBitcoin