After days of dramatic gains, Bitcoin (BTC) is beginning to cool off and undergo some healthy corrections.
A sharp dip came late last night (3 April, UTC), to this new market’s initial support/resistance (S/R) zone at $4,750-4,670. This dump was quickly bought up, however, respecting the 55 hour exponential moving average (EMA) and has held through the morning and day (4 April) above $5,000.
(source: TradingView.com)
The situation thus remains encouraging, as almost all of the impressive gains from April 2 and 3 have been defended – and the price remains well above the critical 200 day simple moving average (SMA), which is often a major market indicator. But the abrupt drop certainly suggests that a reversal is possible whenever “whales” decide to reverse the market.
Another correction down to the 200 day SMA would not be surprising – but a break of the 55 EMA, often an impotant indicator, would not be auspicious for the short term.
FOMOers pay up. pic.twitter.com/TBe4Ea32aX
— Alex Krüger (@krugermacro) April 3, 2019
The correction comes after the leading crypto was rejected precisely at the 21 month exponential moving average (EMA), which was identified in yesterday’s price analysis as a possible point of resistance.
The larger picture comprises a confluence of three very important moving indicators: The 200 day SMA which we have covered; the 200 week SMA which has historically signalled BTC’s bottom; and the 21 monthy EMA, which I discussed in yesterday’s analysis. The 21 monthly EMA formed support all throughout 2018, and is now turned resistance; and this is precisely where Bitcoin was stopped in its tracks yesterday.
(source: TradingView.com)
The 200 weekly SMA was important for Bitcoin’s pre-April market structure; whereas the other two indicators – the 200 daily SMA and 21 monthly EMA – are seeming to contain the now post-April market structure.
In the longer term, if Bitcoin were to range anywhere within this zone, it would be a very healthy consolidation zone and stepping stone to the next price level – namely, breaking out of the 21 weekly SMA.
Alternatively, any break of the 200 daily would probably result in a return to and retest of the 200 weekly – although $4,200 will be a tough support to break.
The views and opinions expressed here do not reflect that of CryptoGlobe.com and do not constitute financial advice. Always do your own research.