Bitcoin price prediction for March 2020: the upward trend might stall next month
How much will Bitcoin be worth next month?
As February comes to an end and investors look ahead to March, Bitcoin is consolidating after experiencing solid returns in 2020. February has historically been a kind month to Bitcoin, but that has not been the case for March. Investors are now facing a difficult decision of where to invest their capital as the coronavirus spreads from China to the rest of the world. This has reduced global forecasted growth projections and weighed on riskier assets.
Bitcoin price in March: seasonality
Historically, Bitcoin has underperformed in March compared to the other months of the year. On average, 60 per cent of the time over the past 7 years the cryptocurrency has increased in value by an average of 1.3 per cent. This is the third-worst performing month. April, July and November have been the best performing months, rising 100 per cent of the time for an average of 1.3 per cent, 3 per cent, and 3.6 per cent respectively.
Bitcoin price next month: headwinds from the dollar
Bitcoin can be traded as a counter currency against many sovereign currencies. The most active sovereign counter currency is the US dollar. The strong performance of the US dollar has generated headwinds for Bitcoin in 2020. The dollar versus a basket of sovereign currencies, such as the euro and the yen, has increased by approximately 3 per cent. Most of the volume of Bitcoin that is traded globally is versus the US dollar.
What is happening with Bitcoin price: technical analysis?
The weekly chart shows that prices are in a range that appears to be tightening. Prices are capped by a weekly downward sloping trend line that comes in near 11,260. Support is seen near the 10-week moving average at 8,940 and the 50-week moving average at 8,505.
The trend in Bitcoin is moving higher, but the trajectory of the trend is relatively flat. The 10-week moving average recently crossed above the 50-week moving average which means that a short-term uptrend is in place. The trajectory of the crossover is relatively flat, and this says that the uptrend could be short-lived, and consolidation could dominate.
Short term momentum has turned negative as the fast stochastic, generated a crossover sell signal. A crossover sell signal in the overbought territory is not a negative signal. The fast stochastic is measured on a scale from 1-100. Levels on the fast stochastic above 80 are considered overbought while a reading below 20 is considered oversold. The current reading on the fast stochastic is 84, above the overbought trigger level of 80, which could foreshadow a correction.
The weekly relative strength index (which is also a momentum oscillator) is gliding sideways with a negative sloping trajectory. This points to further consolidation for bitcoin. The current reading of 58 is in the middle of the neutral range and reflects consolidation. Reading below 30 is considered oversold while reading on the RSI above 70 is considered overbought.
Medium-term weekly momentum is positive but decelerating. The MACD (moving average convergence divergence) index recently generated a crossover buy signal. The MACD histogram is printing a positive reading but the trajectory of the histogram is declining which reflects consolidation.
BTC to USD chart
Bitcoin price prediction in March: bottom line
The positive returns that Bitcoin has experienced during 2020 will likely remain intact, but the upward trend might stall in March. April is generally a positive month, and price action March might be the pause that refreshes in the future. The upward trend might experience a pullback which would provide investors an opportunity to buy on the dips toward the 10-week moving average of the 50-week moving average.
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