Bitcoin price analysis for March 16 - 22: the coin might remain highly volatile this week
Selling could continue as long as the panic lasts. How should you approach trade this week?
Several nations are in lockdown in efforts to control the spread of the coronavirus. This has brought the economies to a standstill and has created panic among traders who are dumping their assets. As long as the panic lasts, there would be no demarcation between risky assets and safe havens. Everything will continue to be sold.
To support the economy, the US Federal Reserve has reduced the rates to zero and has announced a massive stimulus. Soon, other central banks are also likely to follow the Fed in announcing stimulus measures. However, if these measures by the central banks fail to soothe the markets, selling is likely to continue until the coronavirus pandemic is contained.
Let’s study weekly and daily charts to do 0'>Bitcoin price trend analysis for this week.
BTC to USD chart: weekly
Though the crypto market was bearish, the extent of fall last week was surprising. Bitcoin came under intense selling pressure as it plunged from an intra-week high of $8,191.15 to an intra-week low of $3,777, a fall of 53.88 per cent. This shows panic selling as traders just wanted to sell at any level and be in cash.
Bitcoin broke below several critical support levels and also dipped below the support line of the symmetrical triangle. However, the only positive was that on a closing (UTC time) basis, the BTC to USD pair recovered and re-entered the triangle.
On the upside, any recovery is likely to face resistance at the 200-week SMA at 5,525 and above it at $6,408.10. Conversely, if the bears sink the price back below the support line of the symmetrical triangle, the decline can extend to $3,100 and below it to $2,000.
BTC price analysis of the weekly chart shows that bears are firmly in command. Let’s now do the Bitcoin price analysis of the daily chart to see if we spot any possibility of a reversal.
BTC to USD chart: daily
Bitcoin plunged sharply on March 12 and broke below several support levels. Though the bears attempted to continue to downtrend on the next day, buying at lower levels resulted in a sharp recovery that propelled the price back above $5,000 levels.
However, the bulls are struggling to extend the recovery above the $6,000 level. This shows a lack of demand at higher levels as the bulls are not confident that the bottom is in place. The failure to move up will attract selling by the bears.
What is your sentiment on BTC/USD?
If the BTC to USD pair again dips and sustains below $4,800, a retest of the recent lows at $3,777 is possible. With both the 20-day EMA and the 50-day SMA sloping down, the path of least resistance is to the downside.
Contrary to our assumption, if the price reverses direction from the current levels and breaks above $6,000, it will signal the return of buyers. Above $6,000, the next level to watch out for is $6,408.10 and above it the 20-day EMA at $7,323.
The bitcoin price analysis of the daily chart also points to a negative bias in the short term. How should the traders approach trade this week?
Bitcoin price technical analysis March 16-22: how to trade it
We had suggested short positions in our previous analysis, which would have benefitted the traders. We had not expected the extent of the fall but were lucky to be on the right side of the trade when it mattered.
After the drop last week, both the short-term and long-term charts continue to be negative. However, we do not suggest short positions this week as the risk to reward ratio is not attractive.
The traders should avoid cherry-picking until a bottom is confirmed. The first sign of strength would be a break and close (UTC time) above $6,000.
FURTHER READING: Must-read cryptocurrency predictions for 2020
FURTHER READING: Bitcoin explained simply: everything you need to know