- Bitcoin could end the five-year March losing streak with solid gains if resistance at $4,190 (high of last week’s inverted bullish hammer) is convincingly scaled in the next week or two.
- The cryptocurrency reinforced a bullish triangle breakout witnessed last week with a quick recovery from sub-$3,700 levels yesterday. This “buy the dip” mentality indicates scope for a break above the recent high of $4,190.
- The focus would shift to the primary bearish trend seen on the monthly chart if BTC fails to pick a strong bid in the next few days. In that case, the probability of BTC ending March on a negative note for the sixth consecutive year would rise.
Bitcoin is heading into a historically weak month on a positive note and could see gains if resistance at $4,190 is breached.
The leading cryptocurrency by market capitalization has had a tough time in the final month of the first quarter for the last five years. Prices fell 15.7, 4, 4.9, 9.3 and 32 percent in the month of March from 2014 through 2018, according to CoinDesk’s Bitcoin Price Index.
This time, however, March may turn out to be a good month, especially if the early signs of bullish reversal seen in February yield quick progress to levels above the crucial resistance of $4,200 in the next week or two.
Further, BTC has posted gains in February in the previous four years and is all set to extend that winning streak to the fifth year with 10 percent gains.
As of writing, BTC is changing hands at $3,820, having defended key support of $3,700 yesterday.
- Bitcoin has posted gains in February and losses in March for the last four years.
- March has proved a weak month six times out of the last eight years.
3-day and daily chart
On the 3-day chart, BTC has bounced off from the ascending 10-candle moving average (MA), reinforcing the bullish view put forward by that MA.
Further, both the MACD (moving average convergence divergence) histogram and the Chaikin money flow (CMF) are printing bullish above zero.
Meanwhile, the daily chart shows the cryptocurrency has defended the former resistance-turned-support of the upper edge of the triangle pattern with a long-tailed doji – a sign of dip demand.
As a result, a re-test of $4,000 could be on the cards. A violation there would expose the next major resistance lined up at $4,190.
The inverted bullish hammer seen in the weekly chart suggests the bulls are beginning to test bears’ resolve to keep prices lower – a sign the market is bottoming out.
That said, a bullish reversal would be confirmed only if prices end the current week (Sunday, UTC close) or the next week above the inverted bullish hammer’s high of $4,190.
That would validate the bullish divergence of the MACD and the relative strength index’ (RSI) upside break of the falling trendline and allow a stronger rally toward $4,833 (50 percent Fibonacci retracement of the sell-off from November highs to December lows).
However, an inability to produce quick gains above $4,190 would shift focus back to the primary bearish trend, as seen on the monthly chart, and would shift risk favor of a drop to recent lows below $3,400.
Disclosure: The author holds no cryptocurrency at the time of writing.
Source : coindesk