Price Analysis (19 March): The compression levels rose to $58,000!

News • 2021/03/18 • by

Bitcoin / US Dollar

Bitcoin has formed another compression level, this time at higher prices, making the market consider what will be the next move in it. After establishing the previous all-time high level of around $56,000 as a minor support level, the price has formed another focus point around $58,000, which is just a step before the all-time high level at $61,000.

Bitcoin’s price has been “trapped” at a price level between two major trendsetters. The bullish scenario indicates that the market will bring a new positive wave and the price will establish a higher price level with a sharp move. The sharpness of this move will be able to break the resistance around $61,000, which will be a liquidation point for some investors.

This needs to happen as soon as possible because the market will be compressed even more and there is a potential for a turning bearish move. The bearish scenario is based on the fact that the market could not hold the same price levels for long enough. There was a common scenario in previous market situations when the market could not hold high price levels because many investors were waiting for another spike that didn’t come. When there is no foreseeable future for any coin, the market starts liquidations, and the price collapses in the end.

We believe that this thing won’t happen on a massive scale in Bitcoin’s case as the market depth has been increased during the last period, especially with institutional money. There might be a correction in the market until the stronger support levels which lay around $50,000 or $47,000. The trading volumes have increased since the last period, indicating that the investors have mixed feelings about the next move in the market. The moving averages have sustained at bullish formation, confirming the positive outlook for now.

In the short-term diagram, we can observe that the previous all-time high level of around $56,000 is already in the past, indicating that the price has established a strong position above the $55,000 line. This means that the market has passed the price formation at the mid-term level, proving a more solid position for the short-term future.

Indicators

MACD index has remained on the positive side, providing the needed positivity for the next step in the market. The RSI index has passed above value = 60, which is a positive signal as it seems that there is more potential in the market.

Ethereum / US Dollar

Ethereum has sustained the $1,800 level, which is the support level that sustains the bullish trend at this moment. This price level has been the step before reaching the $2,000 all-time high level and it has been a “battlefield” between bulls and bears. Buyers are expecting the price to climb back to the $2,000 level and break it with a sharp move.

We discussed in the Bitcoin section what could happen in a market if the price remains at high levels for a long time, without any movements on the road. This is also a possible scenario in the Ethereum market as the price has remained at high levels for a long time. We expect that the market will try to capture any positive move from the Bitcoin market but there is also a need for institutional investments that will help the market to get a more steady outlook for the future.

We believe that the market will try hard to sustain this price level but any bearish force could make an appearance and change the perspective for the market. The trading volumes have been decreased, for now, showing investors’ lack of interest. The moving averages have come closer but without any bearish formation until now.

Indicators

MACD index has been slightly above the positive area, indicating that the coin wouldn’t have many chances for another positive break in the short-term future. The RSI index remained at value = 55, which predicts a steady outlook for the price with some positive elements.

Ripple / US Dollar

The stability trend has been established in the Ripple market, making investors view it as a stablecoin and not as a trading asset. The price is climbing every day for a little bit and today, it reaches $0.47. This small progress has come along with Ripple’s counter-charge of SEC, responding to the initial charge against Ripple’s founders for “financial fraud”.

At this moment, the price seems to be disconnected from the rest of the crypto market, which could generate a level of unpredictability in the market. This unpredictability is making investors think twice before placing their money at Ripple and could lead to liquidity issues like those that happened when some crypto exchanges stopped Ripple trading when the SEC case came up. We don’t expect any significant move until there is a resolution in the SEC case.

The trading volumes have remained at the same low levels while the moving averages cross each other again, forming a reverse “Golden Cross”. This doesn’t mean anything at this moment as price stability doesn’t allow any price movements that could shape the market.

Indicators

MACD index passed on the positive side, bringing some smiles at investors’ side. The RSI index remained around value = 50, which means that the price will remain on the same levels.

Litecoin / US Dollar

The stability remained on the Litecoin market as its price has stabilized around $200, which is the step before reaching the all-time high level around $240. The support level around $210 will be the starting point for the new trend that could derive in the market, bringing more or less attention to it.

As Litecoin is heavily affected by Bitcoin and Ethereum, we expect that the price formation will follow the market dynamics and establish a similar price formation with them. This means that a sudden turn in the market will bring a stronger effect on the price formation. The trading volumes are lowering since the last period, indicating a decline in investors’ interest. The moving averages are getting closer to each other and they will potentially meet each other if the stability continues to exist.

Indicators

MACD index passed on the negative side, predicting a bearish change in the market formation while the RSI index stayed between values 50 and 55, which are predicting continuous stability in the market formation.

Bitcoin Cash / US Dollar

The same stable scenario has appeared in the Bitcoin Cash market, bringing more attention in the market about its next move. The compression around $520 has created a perspective for the next period in the market that will include the next trend. The first point for establishing a new bullish trend has remained around $600 while the bearish scenario could bring the price below $400.

Both scenarios include more risk than usual as Bitcoin Cash is trying to capitalize on many trends at once, making the market more unstable to long-term predictions. There are expectations for the market but its fulfillment will bring more attention to the market for the short-term period.

The trading volumes have remained at low levels while the moving averages will probably meet each other in the next days if the trend remains on the same path.

Indicators

MACD index remains near value = 0, indicating that the price won’t move in the short-term period while the RSI index is confirming the same stability scenario for the market.

Correlations

Bitcoin / Ethereum = 0.90 (- 0.02), Bitcoin / Ripple = 0.24 (- 0.04), Bitcoin / Litecoin = 0.93 (- 0.03), Bitcoin / Bitcoin Cash = 0.87 (- 0.05)

The correlations have been consolidating in the same direction, indicating that the entire crypto market didn’t react in the recent uptrend from Bitcoin. The same reaction was evident to Ethereum, Litecoin, and Bitcoin Cash as all of those coins have remained on the same price levels when Bitcoin took a small jump during the current period.

On the other hand, Ripple has remained in the lower correlation zone, indicating that it will need a more fundamental approach to rejoin the club with the major trend-setting forces. We expect this to happen and become evident in more indicators.