Bitcoin technical analysis for March 9-15: BTC might slump to $7,300 this week
The short-term sentiment is weak and the crypto market seems to be experiencing a crisis
The coronavirus cases continue to rise across the world with the total number of people infected by the virus at 110,313. Initially, the virus was limited to China and a few other nations but over the past few weeks, several nations have reported new cases. This shows that the virus continues to spread unabated.
This has soured sentiment that has led to relentless selling in various asset classes. Currently, the crypto markets are witnessing selling similar to the risky assets. The narrative of Bitcoin acting as digital gold has not been successful during the current crisis.
As the short-term sentiment is weak and the crypto markets are experiencing a crisis for the first time, traders should tread carefully. Let’s study Bitcoin’s weekly chart and Bitcoin’s daily chart, to spot the levels where buyers might step in.
BTC to USD chart: weekly
The bounce off the moving averages was short-lived. This is a negative sign as it shows a lack of demand at higher levels. The bears will now try to sink and sustain Bitcoin below the next critical support at $7,853.95.
If this support cracks, it might result in long liquidation by the bulls and the BTC to USD pair can slide to $6,408.10 in the medium-term. Below this level, the drop can extend to the long-term trendline, which is currently at $4,900.
However, if the largest cryptocurrency bounces off the $7,853.95 support, the bulls will attempt to carry it above the moving averages. If successful, a move to $9,250 and above it to $10,000 is possible.
The Bitcoin analysis of the weekly chart shows that bears are making a strong comeback and the path of least resistance is to the downside. Let’s do the Bitcoin price analysis of the daily chart to see if we find any possible reversal patterns in the short-term.
BTC to USD chart: daily
As suggested in our previous analysis, Bitcoin moved up to the 20-day EMA but could not clear it. This is a negative sign as it shows that bears are aggressively selling on any minor relief rallies to the resistance levels.
The failure to rise above the 20-day EMA attracted selling and the BTC to USD pair turned around on March 7. Selling intensified as the price broke below the 200-day SMA on March 8. The next support to watch on the downside is $7,853.95.
The 20-day EMA is sloping down and the RSI is close to the oversold territory. This shows that bears are in command. Though the bulls might offer some support close to $7,853.95, the chances of this level holding look dim.
The Bitcoin price analysis of the daily chart also suggests that bears have the upper hand and lower levels are likely in the short-term. How can the traders approach trade this week?
Bitcoin price analysis this week March 9-15: How to trade it
As both the short-term and the long-term chart patterns suggest weakness, the long-only traders can stay on the sidelines until a confirmed bottom is in place. Professional traders can initiate short positions on rallies to resistance levels. However, Bitcoin is not expected to drop below $7,300 this week, hence, be ready to take quick profits. Keep the position size small.
FURTHER READING: Bitcoin explained simply: everything you need to know
FURTHER READING: $100,000 Bitcoin in two years predicts former crypto cynic