Bitcoin (BTC) is entering an interesting position in terms of how it will react to global market forces, as traditional assets and stocks plunge (Bloomberg reports $1 trillion in value wiped out in two days) while gold – the traditional asset perhaps most comparable to Bitcoin, in the eyes of many – has surged. Some attribute this flight to a safer asset as a response to global concerns surrounding Covid-19. We in the crypto space are watching to see what, if anything, Bitcoin will do.
As it stands, Bitcoin hasn’t been doing much since its early 2020 rally topped off at $10,500. Looking at the daily chart, we see that the sideways-downward correction has continued, and is still surrounding the battleground zone around the 21 EMA.
The $9,500 level is still being doggedly supported after multiple tests in the last week+, but the MTF trend is generally pointing below that level. A thick and multi-layered support zone lies between about $9,400 and the high 8’s, although we don’t want to see Bitcoin lose the $9,100 level in order to hold on to the local market structure.
At present, we can still classify this MTF sideways-downtrend is ultimately healthy and beneficial to the larger uptrend. If we look on the 3-day chart, we see that Bitcoin has barely even started carving into its full retracement range, not even yet hitting the .382 level. Only when getting down into the blue box would we begin to worry that the HTF uptrend might collapse.
On the histogram here, we see that a bearish histogram contraction looked like it was starting to roll back into a bullish momentum; but that movement seems to be on hold now after yesterday’s rejection from the top of the trending structure. There is still time on that candle to improve its profile, though.
As we mentioned on yesterday’s analysis, Bitcoin’s weekly histogram (not shown) has started looking bearish. But with several days left in the week, it’s too soon to think about the weekly profile.
Finally, coming way down to a 2-hour chart, we see price engaging with the same support zone again. No divergences are showing up on the RSI for the previous couple days of price action, but the histogram is contracting bullish and we might see a pop out of support soon. Volume is quite low which also suggests a larger move may come today – although here “larger” must be emphasized as a relative term.
Altogether, Bitcoin is still looking stable on all timeframes. The MTF correction has much more room to play out if it wants it, and the HTF uptrend is very much intact.
The views and opinions expressed here do not reflect those of CryptoGlobe.com and do not constitute financial advice. Always do your own research.
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