Academy Trading Ideas Article

Bitcoin Drops Below $8K Again as Volume Becomes Key Factor: Crypto Market Daily

2020.03.11

Bitcoin (BTC) has dropped back below the $8,000 price point on Wednesday, March 11. The leading cryptocurrency had regained value Tuesday after seeing heavy losses — along with traditional stock markets — at the beginning of the week.

At press time, Bitcoin is trading at around $7,850, down almost 4 percent over the past 24 hours. 

The price of Ethereum (ETH) followed a similar pattern over the past 24 hours, rising above the $200 mark, before falling again this morning. At press time, ETH is trading at about $196, down just over 5 percent on the day. 

BTC/USD Perpetual Swap

4H chart BTC/USD Perpetual Swap data. Souce: okex.com

Looking at BTC’s 4-hour chart, we see selling volumes increased to a high level last night, though it still indicated a shrinkage pattern. The strength of the bears is temporarily weakening.

If the 4-hour level can hold the $8,250 level and form a bullish double bottom pattern, it proves that there are more bottoming funds in the area and the market outlook is bullish.

If a triple bottom pattern is formed, we’ll see a longer consolidation market, which means that the main funds need to absorb enough counters before making a breakthrough. 

Investors need to pay attention to the strength of resistance between $8,200-$8,250 and support near $7,700.

Bears suppress attempts to break above $8K

1D chart BTC/USD Perpetual Swap data. Souce: okex.com

Moving on to Bitcoin’s 1-day chart, yesterday, March 10, BTC rose above $8,100 briefly before the bears quickly exerted their strength to suppress the price again.

Several tentative rebounds in the early hours of this morning failed to regain $8,000.

OKEx’s analysts believe that the increased amount of selling volume visible at 12 p.m. UTC yesterday is much higher than the rebound of the previous hour.  

This indicates that there is still a certain amount of short-selling funds active around the $8,000 mark, to a certain extent it can reflect that it will be difficult for the bearish tendency to turn bullish.

The 1-day candlestick closed with almost two inverted hammer patterns. This means that if the price stops falling now, it doesn’t mean the rebound will happen in the short term, as the bulls strength is still weak.

Resistance and support levels

  • Short-term Resistance:$8,000       
  • Medium-term Resistance:$8,250
  • Short-term Support: $7,700
  • Medium-term Support:$7,400

ETH/USD Perpetual Swap

1H ETH/USD Perpetual Swap data. Source: okex.com

The 1-hour chart for ETH shows that the hourly head and shoulder bottoms have failed to form during the dump last night.

ETH’s price reached resistance at one point around $206 and then fell. It is possible to form a double bottom if the trend can stabilize around $190-$197 within the day.

Investors should notice that the second bottom may need more time to form, as the market has to consolidate to digest the previous dump. A rebound to $206 cannot guarantee anything, as it’s possible for the price to fall again at that leve. If the coin can stabilize around $212, it will be a stronger bull signal.

Resistance and support levels

  • Short-term Resistance: $206        
  • Medium-term Resistance: $212
  • Short-term Support: $195          
  • Medium-term Support: $185

Trader’s choice: TRX/USD Perpetual Swap 

4H TRX/USD Perpetual Swap data. Source: okex.com

As the 4-hour chart of Tron (TRX) shows, the trend during this period conforms to the Elliott Wave principle and, as of press time, we predict the last dump wave is likely to finish. 

We can clearly see that the a, b and c waves are the sub-waves of wave three as these are probably the extending waves. This kind of condition tends to appear in an extreme market.

However, as the market is changing constantly and there is no theory that can predict the future 100% accurately, if the price stops falling at $0.01400, it could be a stabilization and rebound signal. The fifth wave can also be an extending one if the price breaks below this position.

Resistance and support levels

  • Short-term Resistance: $0.01600 
  • Medium-term Resistance: $0.01705
  • Short-term Support: $0.01414    
  • Medium-term Support: $0.01305


Disclaimer: This material should not be taken as the basis for making investment decisions, nor be construed as a recommendation to engage in investment transactions. Trading digital assets involve significant risk and can result in the loss of your invested capital. You should ensure that you fully understand the risk involved and take into consideration your level of experience, investment objectives and seek independent financial advice if necessary.


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