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.

bitcoin price 4 april(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 “whalesdecide 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.

 

 

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.

bitcoin price 4 april(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.