Less than 2 weeks after the catastrophic collapse in the Bitcoin price on 13th March 2020, we find ourselves at USD 6604, an impressive 85% bounce off the lows. If you managed to buy anywhere below USD 4000 you are sitting in a very profitable position. In fact, even a buy below USD 5000 is not to be balked at! Is this current Bitcoin bounce in price sustainable and what can we look out for over the coming days?
Bitcoin Price at time of writing: USD 6604
Patterns: Bearish Ascending Channel on 12 Hour Chart, signs of distribution with a target: USD 4900. Bear Flag with a target: USD 3000
Major Resistance: USD 7300
Major Support: USD 6100-6200
Current Outlook: NEUTRAL
Bitcoin Price Consolidation
Over the last 24 hours, the Bitcoin price has been in a range of USD 6454 and USD 6984, with yesterday’s daily closure ending in a Doji style candle. Doji candles usually signify indecision and could lead to a change in trend. It is worth noting that the Doji candle was not accompanied by standout volume, in fact, on the daily time frame one can still see the volume tapering off, a sign of low participation in this price action.
Whilst price is confined between yesterdays high and low with decreasing volume we can mark this as consolidation.
If price ticks above yesterdays high at USD 6984 then we could see a quick move to the USD 7200-7300 area. This is where the monthly 21EMA is currently sitting, the bears will want to defend this level, especially as we are quickly approaching the end of March and a monthly closure below the 21EMA will certainly be bearish. If we get continuation above USD 7300, the next possible target could be the all-important USD 7800- 7900 where we run into stiff monthly resistance.
If price ticks below yesterdays low at USD 6454 then we could see a quick move to USD 6100-6200 as a first bounce candidate, we also happen to find the daily 10SMA in this area. If this price level fails the next area of interest is around USD 5820.
Note: This is not investment advice. It is produced merely for discussion and educational purposes. Do your own research. I am using BitMEX Exchange for charts and Price Data, adjust accordingly for your exchange of choice.
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