Just two days after Cboe announced that it was going to delist bitcoin futures, the cryptocurrency’s spot market turned near-term bullish.
The BTC/USD exchange rate surged 3.30-percent in the past 24 hours to establish a session high towards 4069. Simultaneously, the rest of the cryptocurrency market also went green, with Bitcoin Cash leading the bull pack with 17.81% gains, followed by Litecoin, EOS, and Ethereum that rose 8.44-, 5.47-, and 6.25-percent, respectively. On the whole, the cryptocurrency market capitalization added up to $6 billion worth of investments in a day.
Not the First Time
The bitcoin rally follows an overstretched stable action since February 25. The cryptocurrency’s significant levels remain unchanged as it traded inside a $200-range for almost two weeks. Before that, bitcoin failed when it came to piercing through key resistance areas. At the same time, the cryptocurrency received equally stronger support from bulls on every downside correction. Have a look at this chart to understand further.
One can notice that bitcoin is trending inside a symmetrical triangle defined by red trendlines. It is providing traders a clear understanding of the ongoing price action. As close as the bitcoin price gets to the triangle’s apex, the lesser the volume becomes. At the same time, every upside attempt is failed by a stronger red resistance trendline – barring a few instances of false breakouts. From mid-December to now, the BTC/USD market has seen six of such breakout attempts. The market is now in its seventh one.
Low Bitcoin Volume
Luke Martin, a hugely followed cryptocurrency trader, and analyst, expects the weekend to bring new volume spikes. He tweeted Friday:
$BTC major levels for me remain unchanged as it's traded in the same $200 price range for 2 weeks.
Don't get lost in the noise/low timeframe spikes.
I am expecting some action tomorrow or this weekend as this has been the trend for a month straight. Friday-Sun higher vol… pic.twitter.com/czx1vkhQIt
— Luke Martin (@VentureCoinist) March 15, 2019
The bitcoin market is somewhat mirroring Martin’s prediction. While there has been a modest volume spike on a daily chart, it is still not enough to kickstart a breakout run. Let’s have a closer look:
The orange bar reflects the highest 4H trading volumes in the past two weeks. These are not comparable to the mad spikes the market saw between February 20 and 25 trading hours. Atop that, the BTC/USD market is below the orange bar and, at the same time, its Relative Strength Index, the momentum indicator, is already overbought.
Therefore, there is a considerable possibility of a bearish correction. There is not enough volume to support a breakout action.
I want to be bullish. I really do. But I have to ask myself, what if we're wrong?
— Jonny Moe (@JonnyMoeTrades) March 14, 2019
Not a Rally, Until
Twitterati Trading Room drew an interesting graph reflecting key resistance areas bitcoin must break to establish a rally. As explained in the chart above, we are also expecting a confirmed bullish breakout once the price breaks above $4,408. However, according to the Trading Room, one should watch out for the moving averages. Excerpts from their statement:
“BTC 50 MA has crossed over 100 MA in Daily Chart for 1st time since Aug. Ideal Conditions for a Move towards 200/350 MA. Need big impulse move to confirm a breakout.”
#Bitcoin loves Ping Pong against Moving Averages
My favorite MAs
500 MA$BTC 50 MA has crossed over 100 MA in Daily Chart for 1st time since Aug. Ideal Conditions for a Move towards 200/350 MA. Need big impulse move to confirm breakout pic.twitter.com/2y0z9Kqnzi
— Trading Room (@tradingroomapp) March 15, 2019
Until that happens, every upside move would end up becoming a bull trap.