[PRICE ANALYSIS] MARCH 20: BTC, ETH
Earlier in the week, the US Fed Reserve, ECB, and other central banks announced various stimulus packages meant to cushion the economic effect of the coronavirus pandemic that has caused a lot of businesses to close down indefinitely. Amidst expectations that this will boost investors' confidence in the equity markets and stimulate a proportionate recovery from the global price meltdown experienced since the various government began to impose different restrictions on public gatherings and movements, the equity markets have not responded accordingly. This indicates that investors and traders/speculators still believe that the market conditions will get worse, and they are still waiting for a better opportunity to buy at a lower price.
However, the response has been different in the cryptocurrency market space, with market statistics showing a recovery of about 62% from the market crash that happened on March 13th. This recovery shows that long term investors have taken advantage of short term traders cutting their losses to pile up more units of bitcoin. Another reason for the speedy recovery of the market could be the bitcoin halving, which is due in two months' time.
Also, the increase in the volume of government bailout by several central banks, which has led to an increase in their balance sheets, could lead to inflation after this pandemic is contained. This is due to the fact there have been no corresponding production activities that will match the demand that has been created.
Having said all these, let us examine the markets to see how the major cryptocurrencies have been faring at these times.
BTC/USD
The BTC/USD trading pair witnessed strong buying as it approached the $5000 level. This shows that traders believe that the $3,800 bottom level of last week does not reflect the actual economic value of the coin, and hence would not remain in that region for long.
At the moment, the bears are mounting pressure on the resistance, based on the 20-day EMA. In the event that the pair skips off the support line of the channel and moves over the 20-day EMA, a stage to the 200-day EMA at $8,448 or more it to $10,500 is conceivable.
Conversely, if our assumptions do not follow through, and the pair moves below the support line, it can result in a fall to $5,000. We expect increased buying at these levels.
At times like this, even though the market is showing signs of a speedy recovery, it does not mean that the next bull run is set already. Therefore we recommend caution and proper analysis of market conditions before a trading decision is executed.
ETH/USD
The Eth/USD pair increased recovery speed after it broke above the downward trend line. The bulls meant a resistance at $155 and turned down from that level. The bears drove the price to support of 117.090, where it quickly retraced, as traders accumulated more Eth on the dip.
If the price drops below $117.090, it would indicate that more sellers are active on the higher levels, and a downtrend to the $100 support line would be the next likely thing to watch out for.
Note: This post is culled from Cointelegraph.
