Bitcoin has been all over the place over the past few days. It rose to a lifetime high of $73,835 on March 14, but quickly gave up its gains and plummeted to $64,774 on March 16. This shows that some traders may have booked profits after the recent rally. Will the price of Bitcoin soar to all-time highs again, or is it time for a correction? That’s the question on every trader’s mind.
Sentiment in the cryptocurrency sector was boosted by spot inflows of Bitcoin exchange-traded funds, which remained flat. A record $2.9 billion flowed into digital asset investment products last week, according to CoinShares data. As a result, the cumulative inflow this year reached $13.2 billion, exceeding the annual inflow of $10.6 billion in 2021.
Bitcoin ETFs were expected to stimulate institutional investment, but this does not appear to be the case. The average trade size for BlackRock’s iShares Bitcoin Fund (IBIT) is 326 shares, or about $13,000, according to Eric Balchunas, senior ETF analyst at Bloomberg Intelligence. This suggests that the transaction was conducted by non-professional investors.
In a recent report, Standard Chartered’s Geoff Kendrick said increased interest from reserve managers and possible support from FX reserves could increase investments in Bitcoin ETFs. If inflows remain strong, Kendrick expects Bitcoin to soar to $150,000 in 2024 and continue to hit $250,000 in 2025.
This shows that analysts remain optimistic over the long term. However, they will be closely monitoring inflows as a slowdown could hurt sentiment and tempt traders to book profits.
Bitcoin historically lags between 14 and 28 days before halving. Bitcoin fell 40% in 2016 and is down an even lower 20% in 2020. If history repeats itself, Bitcoin could face short-term weakness.
What are the important support levels to watch out for in Bitcoin and major altcoins? Let’s study the chart to find out.
BTC/USD market analysis
We warned readers in our previous analysis that vertical rallies are rarely sustainable and are usually followed by sharp declines. Bitcoin soared to $73,835 on March 14, but plummeted to $64,774 on March 16.
The bulls are attempting to defend the 20-day exponential moving average (EMA), but the shallow bounce suggests the bears are selling off any small rallies.
If the BTC/USD pair breaks and closes below the 20-day EMA, it could result in several short-term trader stops. The pair may then fall to $59,224 and later the 50-day simple moving average (SMA). Buyers are expected to vigorously defend the 50-day SMA. The pair may begin to consolidate for several days before starting a trend move.
Conversely, if the price rises above $69,000, it could mean that the correction phase is over. The pair could hit an all-time high of $73,835. If this level is extended, the pair could rise to $80,000. However, I think it is unlikely to happen in the short term.
ETH/USD market analysis
We said in our previous analysis that Ethereum’s rally looks likely to be prolonged in the short term and a correction is possible, and that’s exactly what happened.
After failing to break above $4,100, the ETH/USD pair began declining on March 14 and fell below the 20-day EMA on March 16. The bulls attempted to push the price back above the 20-day EMA on March 17, but the bears held their ground. This suggests that the bears are trying to sell as they rise to strong overhead resistance levels.
The 20-day EMA has started to decline and the RSI has slipped into negative territory, indicating that the bears have a slight advantage. The pair may plunge towards the 50-day SMA, where buyers are likely to intervene. Any recovery attempt is expected to face strong selling at the 20-day EMA.
This bearish outlook will be invalidated in the near term if the price rises above $3,700. Such a move would likely indicate solid buying at lower levels. The pair could then rise towards the resistance level of $4,100.
BNB/USD market analysis
Binance Coin has been on a solid upward trend for several days. Momentum strengthened on March 7 after buyers pushed the price above $460. This uptrend pushes the RSI deep into overbought territory, indicating that the rally is overextended in the near term.
Traders began the decline towards the 20-day EMA on March 16th, taking profits near $645. Bulls and bears are likely to engage in a fierce battle near the EMA on the 20th.
If the price bounces off the 20-day EMA, the BNB/USD pair could rise to $645 and remain ranged between these two levels for several days. A break above $645 would signal a resumption of the upward trend towards $692.
On the other hand, a decline below the 20-day EMA could accelerate selling and the pair could fall towards $460, an important support level to watch out for. A strong bounce from this level could keep the pair range-bound for some time.
XRP/USD market analysis
XRP surged from the 20-day EMA on March 11 and reached the $0.75 overhead resistance, but bulls were unable to overcome this hurdle. This means the bears are operating at a higher level.
The price declined from $0.75 and fell below the 20-day EMA on March 16. This means that the pair could continue to fluctuate between $0.48 and $0.75 for some time.
A flat 20-day EMA and RSI near the midpoint offer no clear advantage to either bulls or bears.
If the price slips below the uptrend line, selling pressure may increase, pushing the price down to $0.48. Conversely, if the price rises above $0.67, the tilt is heavily tilted in favor of the bulls. The pair could then attempt a rally up to $0.75. A close above $0.75 could begin a new upward trend towards $0.95.
ADA/USD market analysis
In our previous analysis, we mentioned that a drop below the 20-day EMA could cause Cardano to fall to the 50-day SMA, and that is exactly what happened.
The 20-day EMA has started to decline and the RSI is in negative territory, suggesting that bears have the upper hand. If the 50-day SMA breaks, the ADA/USD pair could collapse towards $0.56. Bulls are likely to actively defend this level.
Contrary to this assumption, if the price bounces off the 50-day SMA, demand will appear to be at a lower level. Any recovery attempt is likely to result in selling off the 20-day EMA. If the price falls from the 20-day EMA, there is a higher chance of it falling below the 50-day SMA.
For the bulls to bounce, they need to keep the price above $0.70. The pair could then rise to $0.80.
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