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Market Analysis

Bitcoin Price Hits $7.3K in a Bid to Finally Break Out

The cryptocurrency and equity markets have seen a relatively stable week, since the volatility and volume emptied from both markets. Bitcoin (BTC) has been moving between $6,600 and $7,300 and has not been showing direction. On the other hand, the quantity is beginning to drop significantly from the markets. 

This type of stable motion and compression along with low volume generally contributes to a large move to happen with only 24 days before the Bitcoin halving.

Crypto market daily operation. Source: Coin360

Bitcoin flirting with all the 100-Week MA to break 

BTC USD 1-week chart. Source: TradingView

The weekly chart of Bitcoin is revealing five consecutive green candles in the previous weeks. That is showing strength as the vast majority of the losses on March 12 or “Black Thursday” have been pared from the recent movements. 

But is this sustainable? The graph is also revealing something different. To start with, a vital break and further upward extension call for a clear break through the 100-Week MA. The crash on Black Thursday caused the cost of Bitcoin to drop beneath the 100-Week MA for the first time since the conclusion of 2018. 

alongside that, the prior support of this cost was found between $6,900 and $7,300, which is now being tested as immunity. Along with this 100-Week MA, an apparent breakthrough could indicate additional upward viewpoints, possibly leading towards $10,000.

Finally, the current run-up is losing momentum because the quantity is dropping and showing fatigue. That is not a strong signal as one would rather need to see an increase in strength causing a gigantic breakout. A good example of such a breakout is exactly what occurred in April 2019, which was a push from $4,000 to $5,300.

Daily interval still fighting resistance against annual open

BTC USD 1-day chart. Source: TradingView

The daily timeframe is combating the annual open as resistance alongside the flat resistance area. The annual open is marked as a significant degree of immunity and is the specific moment the annual candle of 2019 closed and opened the brand new 2020 one.

A clear breakthrough in this resistance area can place the purchase price of Bitcoin back on track towards $7,800-8,000, as that would be another zone to break. 

Worth keeping in mind is that the halving in 3 weeks from now. Normally, these events trigger a “buy the rumor, sell the news” effect leading to a run-up of the cost before the event. Investors then see that the real event is done and does not have much influence in the short term, which triggers the price to fall and results from the “sell the news” effect.

Going back in history, the Bitcoin halving of 2016 triggered a similar movement in addition to the price action in Litecoin. 

But, individuals should observe the gap in market sentiment. In 2016, there was no global pandemic and financial crisis. 

BTC USD 1-day chart. Source: TradingView

Total market capitalization holds crucial $185 billion service level

The complete market capitalization is showing a similar arrangement as Bitcoin. However, the amounts are more clearly defined than on the BTC/USD chart itself.

Total market capitalization cryptocurrency 1-day chart. Source: TradingView

The $185 billion is a vital level since it could show bull/bear momentum on the capitalization. A breakthrough under $185 billion would commence a trend change and short term bearish bias since the market would then be making lower highs and lower lows. 

The market capitalization would also have lost a crucial support level as $185 billion is a significant level.

This movement down didn’t happen, which means the complete market capitalization is most likely going to retest the highs. An apparent breakthrough and reverse of the $210 billion amounts would indicate strength and farther upward possible.

If the $210 billion amounts are broken and reversed for support, further upward momentum can be justified towards $240 billion.

The bullish scenario for Bitcoin

BTC USD 4-hour bullish scenario graph. Source: TradingView

The bullish scenario is pretty simple for the purchase price of Bitcoin. A clear breakthrough in the $7,200-7,300 area are a strong sign for the markets. 

Such a breakthrough could warrant an additional upward movement and, as discussed previously, suggests $7,800-8,000 as the next potential target. 

Hence, the purchase price of Bitcoin is presently facing resistance, which could also be observed on the 4-hour chart. Thus, a breakout, and a daily candle close over the $7,200 level, would probably provide additional upwards momentum. 

Dealers should also take into consideration that moves throughout the weekends are usually a lower quantity and frequently “traps.” These are moves in 1 direction to take liquidity (which is reduced during the weekend), which instantly reverse the other way around.

As a guideline, it is strongly recommended to be patient and await a greater time frame candle closes over the aforementioned levels.

The bearish scenario for Bitcoin 

BTC USD 4-hour bearish situation graph. Source: TradingView

The bearish situation is shown in the graph above. In cases like this, the resistance zone will be analyzed and rejected in the coming couple of days. 

This is confluent with the CME gap located at $7,280, which is still not closed. If the CME futures open on Sunday evening, this gap could be closed.

If the purchase price of Bitcoin rejects within this zone, a brutal selloff could happen in which lower highs and lower lows are generally the upcoming actions to follow. 

Support amounts to watch for would be the $6,600-6,750 zone and the $6,350-6,400 area around the monthly amount.

If Bitcoin drops towards $6,600-6,800 and makes a lower high at $6,900, another support/resistance reverse occurs in which the tendency is supported as bearish with more disadvantage anticipated. 

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