In the past week, global stock markets have experienced the worst week in 12 years, and with the stock market crash, the cryptocurrency market has also been severely hit.
Bitcoin and the entire cryptocurrency market have experienced a sharp sell-off in the past week, and considering that people are selling assets out of concerns about potential economic instability, this result is indeed relatively reasonable. Other safe-haven assets, such as gold and silver, also sold off on Friday.
So, as the halving of Bitcoin is approaching, will the cryptocurrency market be able to find support in the next few weeks, or will it continue the current downward trend?
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Bitcoin sells off after falling below $ 9,400 key support
Earlier, the price of Bitcoin encountered strong resistance at the level of $ 10,400, and then the critical support level of $ 9,400 was urgently tested. However, on February 25, Bitcoin fell below $ 9,400, which immediately triggered a sharp sell-off in the entire cryptocurrency market.
The sell-off has also led to Bitcoin needing to find support in the range of $ 8,200 to $ 8,400. However, in the short term, many believe that the upward trend may have been broken as Bitcoin price hits a lower low at the daily level (a key indicator of the downward momentum).
So, does this mean that the entire cryptocurrency market will change course and enter a downward trend? However, it should be noted that the current price of Bitcoin is still 27% higher than at the beginning of the year, which still makes Bitcoin one of the best performing assets this year.
Weekly need to pay attention to 21 week moving average
The weekly chart is currently in a very critical position, the 21-week moving average. During the last bull market cycle, this level was held in December 2017, and as a support towards the top of the bull market, this also makes the 21-week moving average a level that the bulls need to stick to at present.
If Bitcoin price can be supported at this level, it may mean that the upward momentum will continue for some time to come. Currently, the 21-week moving average is roughly around $ 8,400.
Of course, in order to maintain the upward momentum, Bitcoin must also break through the previous high of $ 10,400, but for now, the most important thing is that Bitcoin must first find support at $ 8,400.
If Bitcoin price can't find support at $ 8,400, the next target will be $ 7,500 to $ 7,700.
Total market value looking for support
From the K-line chart of the total market capitalization, the total market value of cryptocurrencies cannot exceed 300 billion U.S. dollars and cannot find support at 250 billion U.S. dollars, so the entire market may continue its downward trend.
However, the total market value is also approaching a key position, the 21-week moving average. During the entire cycle of the last bull market, the 21-week moving average of the total market value has not been broken.
In addition, in addition to the 21-week moving average, there is a key level that needs attention. During 2018 and 2019, the total market value has been supported several times at the $ 225 billion level.
Is altcoin bottoming out?
The total market value of altcoins shows a similar scenario to the overall market, encountering strong resistance at the $ 115 billion level, and is currently seeking support.
An important level that needs attention first is around US $ 73 billion to US $ 75 billion. If the total market value of altcoins can find support near $ 73 billion, it is likely to return to an upward trend.
Bitcoin's bullish outlook
If Bitcoin wants to return to the uptrend, it will first need to find support at $ 8,250 to $ 8,400 and then rebound towards $ 9,200 to $ 9,400.
Since the key support level of $ 9,400 has been changed to resistance, Bitcoin needs to further break through $ 9,400 if it wants to continue the upward momentum. If successful, it will provide a further rise to the previous high of $ 10,400 two weeks ago. may.
In short, we currently need to pay close attention to whether Bitcoin can get support in the 21-week moving average.
Bitcoin's bearish outlook
There are several cases of bearishness. First, if the price of bitcoin rises without a significant increase in trading volume and falls back at $ 8,950 or even $ 9,175, then it means that the entire trend has turned into a downward trend. Bitcoin Prices should fall further.
At that time, the price of Bitcoin will also test the support of $ 8200 to $ 8400 again. Once broken, Bitcoin will drop further to $ 7,500 to $ 7,700, which is also the last important support level.
Source: Wheatfield Finance