Bitcoin (BTC) is trading at $ 7,106, which represents an impressive gain of 14.7% in the past 24 hours and 6.8% for today. Other global markets are also lagging behind President Trump’s comments on the likelihood of reduced crude oil production, which is one of the triggers that caused Bitcoin to drop from $ 9,000 to $ 8,000 in early March.
When it comes to performance relative to its peers, Ether (ETH) and XRP continue to underperform compared to Bitcoin, as was the case last week. Bitcoin dominance remains at 66%.
24 hour view of the cryptocurrency market. Source: Coin360
Bitcoin price table at 1 month
BTCUSD 1 month chart. Source: Tradingview
Bitcoin closed March with a bearish candle close to previous support at the 20-month moving average, which represented the first close under $ 6,500 in 11 months. Volume in March saw Bitcoin print the second highest monthly volume candle of all time at Coinbase, with only December 2017 winning the price for the highest volume.
The overall volume has shown increasing sales pressure over the past 18 months, but there has been a significant release above the VPVR checkpoint which indicates the price at which the largest volume was traded (yellow horizontal line ).
The next volume node is where the bulls and bears are fighting now. In the past, Bitcoin has never spent a long period of time between $ 4,000 and $ 6,500. Thus, despite the bearish closing, the total rejection of transactions below $ 4,000 is encouraging for the bulls who very quickly neutralized the event of deleveraging.
The relative strength index tends to 49, which is neutral and fairly representative of the current price position.
1 week Bitcoin chart
BTCUSD 1 week chart. Source: Tradingview
The weekly Bitcoin chart shows that the price, currently trading from previous support, has now turned resistance around $ 6,800. There is also a diagonal resistance that forms the top of a channel from which Bitcoin broke out earlier this year, but ultimately dates back to July 2019.
The 200-week moving average defines support with very little price action occurring below it for a period of time, indicating demand and lack of supply. The 20 and 100 week averages are likely to be a formidable point of resistance for Bitcoin as they have always been very important areas of support and resistance which dictate the bullish or bearish nature of the market.
The volume-weighted average price (VWAP) since the start of the year, which is the volume-weighted average price for the year, is $ 7,100 (like 100 WMA). This implies that there will be an inflection point which normally acts as a magnet for the price where most of the business has taken place.
Overall, the moving averages of 200 (at $ 5,588) and 100 (at $ 7,095) dictate local support and resistance, the latter currently being attacked by bulls.
Bullish buying volume has persisted for the past three weeks, but decreases as the price increases. This is generally considered to be tilted downward in an uptrend where bulls are losing momentum, although it should be noted that the recent volume has been unusually high.
The Chaikin Money Flow oscillator, which examines the amount of money flow volume over the past 20 weeks, shows that there is an upside divergence within the volume, which indicates relative buying pressure.
4 hour chart
BTCUSD 4 hour chart. Source: Tradingview
The 4-hour Bitcoin price chart shows a series of higher declines for BTC / USD and helps illustrate demand at the 200-week moving average and below, both of which are running. There is also a failed head and shoulder peak, which was another indication that the bulls are controlling the narrowing price range.
The CMF became positive, which is a good short-term signal for the bulls. But overall it is relatively neutral, which indicates the drop in volume. The RSI Stoch indicates that Bitcoin is overbought in shorter time frames.
CME and forward data
CME Futures 1 week chart. Source: Tradingview
The CME produces a Trader Engagement Report released on Friday, which aggregates the net trading positions of traders of different sizes to identify the overall directional position for each category.
Large traders or institutional traders are illustrated by the red line on the chart above and it is easy to see that they are almost always short Bitcoins, but doubled on their short positions in 2020 between $ 8,200 and $ 10,700. The graph shows that they only closed them the last time they fell from $ 8,000 to $ 4,000.
The reason why this is important is that we know that much of the buying pressure for CMEs came from the closure of large short positions. Retail and professional traders contributed to the sale as expected, while institutions benefited from the closing of short positions in the supply generated by the decline.
We can therefore assume that the institutions will be interested in shortening the same range as previously, starting at $ 8,200. This is also in confluence with the weekly moving averages likely to provoke resistance and also the annual pivot which is at this price.
As such, CME data can be useful in monitoring the behavior of large traders if Bitcoin can reach $ 8,000.
The chart also shows the Bitmex finance rate, which historically has had an inverse relationship to price direction when it was particularly high or negative. This shows that it is again slightly positive, indicating an upward change in the market. In other words, the sentiment had turned (to resistance!), Which could be an opportunity for the bears.
Looking forward to
Bitcoin shows an obvious lack of selling interest below the 200-week moving average and buyers appear to be intervening at these levels, which is clearly bullish.
Any upside break is likely to be eventually resisted around the $ 8,000 level due to the confluence of technical resistance and known institutional short selling interests.
The first real bullish sign would be to start recovering each of the weekly moving averages and start transforming them into support, with the level of $ 7,100 at the 100 week moving average being the first objective. In the event of a new recession, the 200-week moving average will be the first line of defense.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading movement involves risks. You have to do your own research when you make a decision.