Academy Trading Ideas Article

Bitcoin Falls Into Intensive Trading Zone Around 2019 Bottom: Crypto Market Daily

2020.03.12

Crypto markets are taking a heavy hit today, March 12, as top cryptocurrencies see double digit losses over the past 24 hours. 

Bitcoin (BTC) has suffered the least of the top ten coins, down almost 6 percent on the day and trading around $7,300 this morning. 

Ethereum (ETH) has seen more severe losses, losing its grip on the $180 support mark and plunging over 15 percent over the past 24 hours. The second largest cryptocurrency by market capitalization is currently trading around $170.

BTC/USD Perpetual Swap

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

Looking at Bitocin’s 4-H chart, we see that the $7,700 support level was not effective and the price fell below it in just one hour early morning on March 12.

In fact, the price had already given a falling signal after failing to break $8,000 again this morning, and the moving direction means that our prediction from yesterday was impossible to fulfill. Along with the failing of the double bottom, market sentiment will be worse.

The trading volume chart tells us the reason for the price falling: even though the active selling volume is decreasing, a lack of buying funds is the main factor that makes it so that just a low level of selling funds can lead to a big drop. Investors are beginning to be careful and pessimistic.

The good news for the bulls is that the $7,000-$7,700 range is an intensive trading zone and formed a bottoming area at the end of 2019. This support area will be the strongest, making it a time moment to buy some spots.

Traders look to $7,000 as next support level 

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

Let’s change our sights to the 1-day chart. As we’ve indicated on the above chart with arrows, you can see that BTC is moving to express a completely head and shoulder top pattern. If $7,000 can become another bottom in the future, a daily level of rebound can be expected.

Daily selling volume also assumes a weakening trend, but it’s still at mid-level for today. It is possible to reach a price range near the $7,000 level in the short term, and a rebound may happen if prices can stabilize there for about one week. 

Please note that if the price breaks below $,7000, we will have two possible scenarios: if it’s a false break, a rebound may happen immediately; or if it’s a real break, accompanied by heavy selling volumes, then a real bear market will arrive.  

Traders should pay attention to the effectiveness of the area between $7,000-$7,700 this week.

Resistance and support levels

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

ETH/USD Perpetual Swap

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

Compared with BTC, ETH has fallen even more over the past few days. The current period of losses has almost erased all of ETH’s gains since the beginning of 2020. The coin broke below its strong support of $180, meaning that panic is getting higher.

The trading volume chart shows us heavy selling volumes still exist in the ETH market and the dumping volume for today is even higher than the past one. Therefore, it’s hard to be precise about the location of the bottom until the volume has shrunk.

The current trend could indicate that the next effective support level is around the $155-$160 area. If the coin can stabilize here, there may be a chance for a rebound, or price may move downward to test $140.

Resistance and support levels

  • Short-term Resistance: $177      
  • Medium-term Resistance: $185
  • Short-term Support: $160          
  • Medium-term Support: $155

Trader’s choice: TRX/USD Perpetual Swap

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

The moving trend of TRX has conformed to an integrated cycle from bullish to bearish. Buying volumes have increased gradually during the bullish trend, and selling volumes decreased gradually during the bearish trend. 

Compared with BTC and ETH, the volume levels of TRX are extremely reduced, and the price is almost moving near the lowest recorded level. Thus, the rebound chance will be higher for this coin. 

However, the precondition of a rebound is that the market has to be stabilized, or else it’s possible to create a new low in the future. 

Investors should note the support strength around $0.01300, trend could go the opposite way if it’s effective.

Resistance and support levels

  • Short-term Resistance: $0.01450 
  • Medium-term Resistance: $0.01540
  • Short-term Support: $0.01300    
  • Medium-term Support: $0.01200


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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