Bitcoin Analysis for 22/03/2021

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During the weekend, bitcoin's price stalled. It dropped 5% at its worst point in the weekend and traded below $56,000, but has now recovered and, at the time of this writing, it was trading around $57,300 according to CoinGecko.

We expected bitcoin's price to start rising and perhaps break $65,000 but that did not happen.
Independently, bitcoin's price traded within the predicted (blue).

Two weeks ago, bitcoin reached a new all-time high of $62,000 but has since corrected. We think it may be in a minor consolidation period that should soon conclude.

Our reasoning is also supported by the Volume Profile Visible Range (VPVR) on the left, which shows buyers are in control until $56,000 which indicates that bitcoin won't likely drop below this price range.

Today, more bullish news came out. Forbes' Billy Bambrough quoted Deutsche Bank analyst and Harvard economist, Marion Laboure, who wrote that

"Bitcoin's current valuation is pricing in a shift toward cross-border digital currencies; the hypothesis is that bitcoin, as the leader, will benefit from network effects and become an important means of payment in the future, Laboure wrote in a report on the future of payments this week."

This is excellent news because it shows that traditional analysts are now paying close attention to bitcoin's development and consider it may even become an essential means of payment in the future.

Hence, we think investors and traders should take maximum advantage of the ongoing correction and add bitcoin to their portfolios.

We remain bullish on BTC/USD as long as:

  • BTC/USD remains above its 20-day MMA (red), 50-day MMA (green), and 200-day MMA
    (blue).
  • BTC/USD doesn't drop below $55,000.
  • BTC/USD daily volume goes above its 21-day Modified Moving Average soon.

Traders’ Food For Thoughts

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This week’s first tweet comes from Trading Tank, a trader.

In his post, Trading Tank shared a 4-hour chart of bitcoin’s price. Additionally, the trader added two lines, one showing support at the bottom and another resistance at the top.

Interestingly, bitcoin’s price keeps moving within the predicted range and even touched $55,500 before moving back above $57,000. As Trading Tank predicted, bitcoin hit the first support level below the blue range.

If bitcoin picks up the pace and goes back towards $59,000, the first resistance level would be at $60,100; afterwards, the trader identifies $61,897 as the second resistance target.

At the moment of this writing, bitcoin’s price is holding steady above $57,000 - which means the likelihood bitcoin will continue to move up is growing.

Until bitcoin moves below $55,000, we remain bullish on the short-term price.

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The following post comes from Lex Moskovski, whose Twitter describes him as the CEO/CIO at Moskovski Capital.

Moskovski shared the “Futures Long Liquidations (Total) - All Exchanges (USD)” and wrote that “$138m #Bitcoin longs liquidated in 10 minutes.”

We’ve picked this chart as it shows one of the reasons why bitcoin’s price recently tanked. About $138 million long positions got liquidated in the past day.

This is also why we advise extreme care when using leverage to trade since it significantly increases both the risk and potential gains.

Independently, this recent downturn should be short-lived. Let’s discuss why next.

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The following tweet comes from Michael van de Poppe, a full-time trader at the Amsterdam Stock Exchange.

Poppe wrote that

“Corrections are healthy and organic. Stop zooming in on the charts and relax.”

Essentially, Poppe highlights how necessary corrections are and that there is no point in freaking out about bitcoin’s price drops. He advised investors and traders to zoom out since the long-term chart is still bullish.

As we constantly remind readers, use corrections to add to your bitcoin portfolio or open long positions.

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The last post of the day comes from Willy Woo, a well-known crypto analyst with over 300,000 followers on Twitter.

In his post, Woo shared the "Bitcoin: UTXO Realized Price Distribution (URPD)", that according to Glassnode:

"shows at which prices the current set of Bitcoin UTXOs were created (i.e. each bar shows the amount of existing bitcoins that last moved within that specified price bucket)."

The chart shows extremely bullish data that Woo highlights related to bitcoin that moved after the total market cap reached $1 trillion. He wrote,

"7.3% of bitcoins last moved at prices above $1T" and added that "I'd say there's a fair chance we'll never see Bitcoin below $1T again."

This means that, according to Woo, the likelihood of bitcoin's price drops below $54,000 is relatively low. We tend to agree with him, even though we think that in case bitcoin's price does not surpass and remain above $60,000, it may as well drop below $54,000.

We think that the above won't likely happen, but it's essential to play both games.

Tomorrow’s Price

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At the time of this writing, bitcoin's price is trading close to $57,400, according to CoinGecko.

Bitcoin's price declined around 3% during the weekend, but we think the medium to long-term bullish trend remains intact. Despite our bullishness, volume remains falling, which may indicate a massive swing is coming. We hope for the upside.

Adding to that, most traders think this is just a blip in the road to a new record price.

How do we think the price will trade today? As shown in the above chart, we believe that bitcoin could top a little over $61,000 in the next few days, as long as buyers continue to put large buy orders above $55,000.

On the other hand, we don't expect the cryptocurrency to drop much below $55,000. If it fails to hold that level, the next support zone is around $48,000.

To finalize, the VPVR shows a high number of buy orders between $47,000 and $50,000 and that there are almost no sellers left above $60,000, which means once BTC/USD rallies back up, it should break a new high and continue into price discovery mode.

Posted Using LeoFinance Beta



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