News
March 22, 2021

BOTS crypto news week 11

This week, the volatility of the cryptocurrency market decreased and the market consolidated for the most part. Both Ethereum and Bitcoin are in a price range, which gives smaller altcoins the room to make nice gains. In this week's update, we will take a look at how things are looking technically for Bitcoin and Ethereum.

BOTS crypto news week 11
BOTS crypto news week 11

By: Steven Eblé

Bitcoin

Bitcoin currently ranged between US$50,000 and US$60,000 for just over a week. The volatility of the last few months has decreased this week. The fact that volatility is decreasing after violent price increases is very good for the market.

Last week I indicated that Bitcoin was in a rising channel and that bearish divergence was visible on the macd which had already started to develop. This could be deduced from the fact that the price made a higher high, while the macd made a lower low. I also indicated that if Bitcoin indeed started to drop due to this bearish divergence, the bottom of the channel could provide good support. In the chart below you can see that the bottom of the channel has indeed provided support twice. At the moment Bitcoin is still in the channel but how long can this last?



Looking at the horizontal support and resistance zones it can be seen that Bitcoin is currently testing the all time high from February of 58,500 US dollars as resistance. If this zone is broken, I think it is likely that Bitcoin will be able to make new all time highs. However, this does not seem to be the case at the moment. A bearish retest of the resistance around 58,500 US-dollar is more likely.

If the old all time high indeed turns out to be a too strong resistance, the 54.000 US dollar might be tested. If this resistance should fail to hold, the next station to be reached will be the US-dollar 52.000.



My expectation that Bitcoin does not (yet) have the strength to break the US$58,000 barrier is derived from the chart below. In that chart you can see Bitcoin on the daily time interval. You can see there a bearish divergence following from the fact that lower lows are made on the rsi and macd followed by higher highs of price. Bearish divergence indicates that buyers are getting tired and can be an indication of a trend change. On the MACD one can see that the bearish divergence has already started to play out. It seems likely to me that the different support levels I mentioned above will be tested before Bitcoin can continue to rise.



The graph below shows that there is a clear supply and demand line.

We are now approaching the apex of the pattern where Bitcoin will have to make a choice. We are currently below a strong resistance at 58,500 US dollars. There is also a bearish divergence on the daily timeframe. These are two reasons to assume that the probability of Bitcoin breaking out of this pattern is more bearish than bullish.

In the event that Bitcoin does break bullish from this pattern, new all time highs are very likely.



Ethereum

Ethereum is still above the support of 1,700 US dollars, just like last week. This support has been tested about 6 times. This makes the support weaker and weaker. If Bitcoin were to drop a bit this week, there is a chance Ethereum would also drop. The support would then be broken. If support is broken, Ethereum might fall back to levels around 1,500 US dollars.



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