Since the beginning of the week, the price of Bitcoin (BTC) has fallen by more than $ 38 billion, as traditional markets have also fallen by more than 10%. As reported in mainstream media, this week’s collapse of the largest stock markets is the worst correction since the 2008 collapse and more than $ 3.8 trillion in value has been wiped out as the daily news of the Coronavirus spreads. propagating around the world dominated the headlines.
Investors are now wondering if the rally that boosted the price of Bitcoin from $ 6,400 to $ 10,500 is over and that the end of the month is approaching, Bitcoin is on track to record a monthly loss in February for the first time in 6 years .
On Friday, the price of Bitcoin appeared to be the second day of stability in the $ 8,500 to $ 8,750 area, while traditional markets continued to fall. Freefall among altcoins also seems to have stopped and Chainlink (LINK), Huobi Token (HT), Tezos (XTZ) are standout artists.
Daily crypto market price table. Source: Coin360
As of this writing, the price of Bitcoin is forming higher lows and is trading above the high volume node of the VPVR at $ 8750. If the price can stay above $ 8,750, traders can start to feel more confident about a bottom hit at $ 8,432 and by intervening to open long positions, the price could quickly rise across the Volume variance in the VPVR from $ 8,870 to $ 9,123 where the Bollinger band indicator’s 20-MA currently resides.
Next week, a large volume disruption due to improving stock markets or positive news related to Coronavirus could see buyers pushing the price above the $ 9,100 to $ 9,300 level.
6 hour USDT BTC chart. Source: TradingView
The shorter delay also shows the moving average convergence divergence about to shoot above the signal line and as the volume of the bull increases, another positive is the shortening of the MACD histogram bars and the approximation of 0 on the indicator. The relative strength index (RSI) also rebounded in the oversold territory, currently recording 37.
As mentioned in a previous analysis, the volume of trades will tell us if a bullish reversal is underway or if day traders are simply trading support levels and bouncing rebounds for quick profits.
USD BTC daily chart. Source: TradingView
In the short term, it would be encouraging to see the price cross above the Bollinger band’s moving average to recover $ 9,100 to consolidate in a range of $ 9,100 to $ 9,400 before going to $ 9,500.
The $ 8,500 support also corresponds to the 128-day moving average and the loss of this support would raise some concerns, because the price history shows that the price of Bitcoin took a worse turn when it was lower than 128-MA .
If the price fell below $ 8,500, traders could anticipate a rebound to $ 8,000 where the Fibonacci retracement level is at 61.8%, and below there is support at $ 7,400, which is slightly the Fibonacci retracement at 78.6%.
For the moment, the market is still weak and although indicators like the MACD and the RSI provide positive symbols, the state of the traditional markets and the situation with the coronavirus could continue to have a negative impact on the prices of cryptos. next week.
The Crypto Fear and Greed index, a popular indicator used to gauge investor sentiment in the sector, currently reads “Fear” at 38.
Crypto Fear and Greed Index. Source: Alternative.me
This shows that investors remain bearish on the short term price action in the crypto market, but it is a well known fact that many traders compensate the signal by buying Bitcoin when the indicator is extremely bearish and selling it when it is extremely bullish.
Obviously, each investor should do their own research before purchasing crypto assets, especially with the current state of the market, but it also seems likely that investors will soon see Bitcoin prices between $ 8,500 and $ 7,400 as an opportunity. to open long positions. Risk-averse traders will likely be looking to buy a break above $ 9,400 – $ 9,500.
The views and opinions expressed here are solely those of author and do not necessarily reflect the views of Cointelegraph. Each investment and trading movement involves risks. You have to do your own research when you make a decision.
