Bitcoin price analysis for April: prices will likely remain rangebound next month
How to trade the cryptocurrency next month
0'>Bitcoin rebounded for the second consecutive week during the last full week of March. The exchange rate versus the greenback held up as the dollar index hit fresh three-year highs and now appears to be gaining traction as the dollar loses ground. With the Fed announcing an uncapped quantitative easing (QE) programme after cutting US interest rates to zero, the dollar should remain on its heels, providing some footing for Bitcoin. Let’s do BTC price analysis and see what may happen to the main crypto next month.
The Fed and Congress
Central banks around the globe have been proving significantly liquid in the face of the economic contraction driven by the spread of the coronavirus. On March 26, the US Senate passed a bill that will provide $2.2trn in stimulus to American families and businesses. The bill is likely to pass in the House of Representatives which would provide a huge stimulus that may be followed up by additional policy.
Economic data will likely remain ugly during the balance of March and April. The US reported much worse-than-expected jobless claims on Thursday, but the markets appeared to take the huge increase in their stride. The US Labor Department reported that the number of people looking for unemployment insurance surged to 3.28 million. This follows a rise to 282,000 in the prior week. To put this in perspective, at the height of the Great Recession the peak of unemployment claims was 665,000 in March 2009 and the all-time mark of 695,000 in October 1982. Expectations were for claims to rise to unprecedented 1.5 million claims. Despite the worse-than-expected numbers, riskier assets and alternatives to the greenback have gained traction.
Bitcoin price technical analysis
While Bitcoin prices have climbed for two-consecutive weeks, the tumble in the exchange rate versus the dollar has been dramatic. Resistance in BTC/USD is seen near the 10-week moving average at 8,236. Additional resistance is seen near the 50-week moving average at 8,628. Support is seen near an upward sloping trend line that connects the lows in December 2018 to the lows in March and comes in near 4,140.
The trend is downward sloping as the 10-week moving average crossed below the 50-week moving average. Medium-term momentum is negative as the MACD (moving average convergence divergence) histogram is printing in the red with a downward sloping trajectory which points to lower prices. This follows a crossover sell signal. This occurs as the MACD line (the 12-week moving average minus the 26-week moving average) crosses below the MACD signal line (the nine-week moving average of the MACD line).
What is your sentiment on BTC/USD?
Short-term negative momentum is decelerating as the fast stochastic is poised to generate a crossover buy signal in the middle of the neutral range. The RSI (relative strength index) also rebounded which reflects a bottom in negative momentum. The current reading of the RSI is 40, which is on the lower end of the neutral range.
While the strong moves by the Fed should weigh on the dollar and help Bitcoin gain traction, the negative impact of the technicals will make it difficult for prices to gain ground. Prices will likely remain rangebound in April making lower highs and higher lows building energy. A break above a downward sloping trend line near 12,000 will signal that a new uptrend is in place.
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