Price Analysis (24 March): Small correction brings rebound in Bitcoin

News • 2021/03/24 • par

Bitcoin / US Dollar

Bitcoin made a minor correction in the previous days, as depicted from the symmetric triangle formed in the chart. The compression point around $56,000 broke down and the price landed at $54,000, establishing another example of how a compression triangle is resulting. Today, the market made another jump in the price level of $56,000, creating hope among investors that the market has cleared out.

The compression point around $56,000 lays on the same ground as the previous all-time high level. This means that there is enough support in the market depth to sustain those price levels and boost the market for another bullish trend in the short-term future. The rebound was a positive turn in the market formation, which indicates that the market is ready for a new battle round between bulls and bears.

We expect another round of compression trend unless there is a major evolution in the Bitcoin market that will be driven by any institutional party that could take a position in favor or against Bitcoin. The trading volumes have made some progress during the weekend, which means that the investors are trying to make a comeback for the next period. The moving averages have been close and a cross between them will mark a change in the market structure.

In the short-term diagram, we can observe that the market is moving forward towards the compression point of around $56,000. This feature brings more depth to the market as there is a continuous battle between bulls and bears when the assets are changing hands constantly, trying to fulfill the expectations for every group.

Indicators

MACD index remained on the negative side, indicating that the market is not ready yet for another bullish turn that could shake up the current situation. The RSI index moved around value = 55, indicating that the market will remain on the same price levels but with a positive outlook for the next period.

Ethereum / US Dollar

The correction in the Bitcoin market brought another correction trend in the Ethereum market also, shaping the price decline to $$1,650. The same happened when the price made a rebound, where Ethereum made a small jump at $1,730. Those movements show that Ethereum has strong ties with Bitcoin’s market formation, even if their correlation is dropping during this period.

The situation in the Ethereum market could return to bullish fundamentals if the price manages to rise at the $1,800 level, which was the step for achieving the all-time high level at $2,000. If this comes into reality, we believe that the market will try to establish a better position for achieving higher levels. We expect that Ethereum will follow the major trend in the Bitcoin market but its adaptation will be much lighter in the price formation process.

The trading volumes have remained at low levels, comparing with the previous period, indicating that investors have entered a waiting mode, trying to take advantage of a future situation. The moving averages will cross each other tomorrow, bringing a bearish signal in the market, a reverse “Golden Cross”, which means that the market might enter a downtrend position from this point and on.

Indicators

MACD index remained on the negative side, but there was a small jump in the index chart. The momentum is still negative but there is an option for a positive change in the next period. The RSI index landed at a value = 50, indicating that the price will remain at the same levels for now.

Ripple / US Dollar

As we have stated in previous articles, Ripple remains the exception in the crypto market, continuing to move in an uptrend. The price climbed to $0.55, establishing its position in a price zone, which is familiar in the Ripple market.

The familiarity with those price levels derives from the fact that the market was on the same levels in late December 2020 and late February 2021, following by a major correction in the market. Following the past, we should expect that investors would consider the price levels above $0.50 to be overrated and start to sell their Ripples. Ripple’s disconnection from the rest of the crypto market makes any attempt for fundamental analysis difficult and trying to predict the next move even harder.

The trading volumes got a little jump, indicating that some investors were lured from Ripple’s disconnection from the rest of the market and dropped more attention in this market. The moving averages have established a more bullish position which might bring more uptrend in the market.

Indicators

MACD index is continuing to grow in the positive area, indicating that the momentum has played an important role in the price formation during the recent uptrend. The RSI index moved to value = 65, showing that there is more room in the market to grow at higher levels.

Litecoin / US Dollar

Litecoin’s movements seem to copy the established situation at Bitcoin and Ethereum markets. The market corrected at $185 when Bitcoin and Ethereum made the same drop in their markets while the rebound took place at $195. The depicted situation could be formed in the next higher level, which lays in Litecoin’s situation around $200 - $210.

We expect Litecoin to follow loyally any move in the Bitcoin and Ethereum markets, trying to capitalize any move in those markets. If Bitcoin and Ethereum try to break new all-time high levels, Litecoin will also try to climb towards its all-time high level, above the $240 point. The same approach was evident throughout Litecoin’s recent history, with small breaks when there was a major bullish outbreak in the Bitcoin market.

The trading volumes have remained on the same levels, just like Bitcoin and Ethereum markets, indicating that investors are waiting for the next trend to be established and have a clearer view of the future. The moving averages crossed each other, forming a reverse “Golden Cross” which indicates that there could be a change in the market momentum that could lead to a new trend.

Indicators

MACD index continued to move on the negative side, bringing less attention to the market and negative momentum in it. The RSI index moved to value = 50, indicating that the market will try to remain on the same price levels for now.

Bitcoin Cash / US Dollar

Bitcoin Cash has retained a certain level of stability in its market, laying around the $520 point. This compression point didn’t seem to be affected by the major trend in the Bitcoin market and continue to put more power in it. As we know from previous experience, the more a compression trend is lasting, the more sharp is the next move in the market.

This could also happen in the Bitcoin Cash market in a bullish scenario (the price could climb to $600 and beyond) or in a bearish scenario (the price could correct to $400 or even lower). In any case, we should wait for the next trend to be established for another round of battle between bulls and bears. The trading volumes have remained at low levels, indicating that the market is waiting for the next move. The moving averages crossed each other, forming a reverse “Golden Cross” and sensing a bearish future for the coin.

Indicators

MACD index has moved near value = 0, indicating that there is no momentum in the market at this moment to drive the price in either direction. The RSI index is confirming the same scenario, as its value lays around 50.

Correlations

Bitcoin / Ethereum = 0.76 (- 0.09), Bitcoin / Ripple = - 0.02 (- 0.14), Bitcoin / Litecoin = 0.80 (- 0.04), Bitcoin / Bitcoin Cash = 0.78 (- 0.01)

The correlation trends have started to change in a disintegrated move. Litecoin and Bitcoin Cash have milder reactions in the minor correction that happened during the last days and the consequent rebound. Those coins have retained their strong relationship with Bitcoin, something that happened also with Ethereum, whose correlation has dropped into the medium correlation zone.

The corrections in the correlation zone will bring another wave in the market regarding its price formation. The opposite depiction could be described in the Ripple market, whose correlation has passed at negative levels, indicating that the market moves are completely unrelated to what is happening in the Bitcoin market.