Since my last “official” analysis on this site, Bitcoin indeed continued its way down and reached the “potential buying zone between 8,000 and 8,500 USD” two times (March 9th and March 11th). The expected but very fast bounce out of this zone made it back to 9,900 USD. But the failure already below the psychological resistance at 10k was too much for the bulls and Bitcoin prices immediately turned back down. In the following days, bulls lost even more confidence and prices went into free fall until the recent low at 7,250 USD.
As the rollercoaster show must continue a massive bounce from extremely oversold levels started here which took Bitcoin quickly back to 9,177 USD. Some of the altcoins came back to life as well during this furious recovery. EOS exploded 88%, IOTA bounced 50% and Qtum nearly doubled. After the strong downtrend since early March, this was a healthy and necessary bounce for the whole crypto sector.
Yet basically all altcoins and Bitcoin itself continue to trade way below their December/January highs and have not been able to break out of the established downtrend channels.
Bitcoin Technical Analysis
Although the recent bounce (short squeeze) made it back to 9,177 USD, the daily close has been below the critical 38,2% retracement level (8,943 USD). Remember at 11,800 USD, this behavior has been a clear sign of weakness and as of now, it seems to be the case again. But should Bitcoin be able to move above yesterday´s high at 9,177 USD it is very likely that the recovery will continue towards 9,500 – 10,000 USD. This would be a great opportunity to reduce one´s exposure and/or open some hedges. I doubt that Bitcoin will be able to break through the downtrend channel!
Overall I expect a confusing and irritating sideways movement over the next couple of weeks. There will be some good short-term opportunities in both directions but I guess after these wild swings its time to take a breather and calm down at least a little bit. As well volatility will have to shrink. As long as Bitcoin stays above 8,000 USD bulls are in control for now.
