Bitcoin’s Resurgence Marred by Choppy Price Action

09:18 11 April 2022

Bitcoin’s resurgent run in the back end of March translated to nothing as investors are left scratching their heads about which way the price will move.

Bitcoin’s price action was very interesting to track after a long time. For two weeks, it showed a lot of life. A lot of promise, too, if I may add. It made a short work of the stubborn $45000 resistance level this time around and was shaping up for another bullish rally. Although Bitcoin was on a bit of a roll, it was unable to turn the momentum it had going into something huge. The market was buoyant, in part to the temporary show of strength, and investors and traders thought the wavering recovery from several months of downside had come to an end. In an anticlimactic manner, however, the digital token plunged back into a zone where pretty much nothing happens, and it is now back to its boring best. Two weeks of interesting price action only to fizzle out into a false breakout. It turns out, Bitcoin pulled off a clever April Fool’s day prank on all those eagerly anticipating the end of the 6 month-long bearish downturn.

Largely Choppy Price Action;

Bitcoin’s wild ride in the last 14 days has seen it ebb and flow between the extremes of a new range. The leader of the crypto pack registered a high of $48234, turned sharply as sellers took control, and then made a short term low of $42115. The price action was largely choppy for a week before the massive red day on the 6th of April. It’s been two days since the humongous slide and the digital token has spent all the time moving up and down in a tight range, however with wild swings occasionally. Investors and traders keep their eyes glued to charts and are waiting with bated breath to see what comes of this contraction in price. At the time of writing, Bitcoin is exchanging hands for $43800.

100 day Moving Average Crucial

Traders, take note. From a technical analysis standpoint, what stands out on the daily chart of BTC/USD is the price action that we witnessed on March 28 when the leader of the crypto pack came so close to regaining the 200 day moving average (MA). For the mathematically inclined, Bitcoin got within touching distance ($40) of the key moving average indicator, which has somehow managed to elude it ever since the second day of the calendar year.

That being said, Bitcoin has done well to hold itself over the 100-day MA for close to 18 days now. The sharp rise upwards also pushed it above the critical 38.2% retracement level of its move down from the all-time high it registered in November last year. Despite making several attempts, Bitcoin has not been able to quite get over that key mark, which is a bearish sign. For the prices to go up from here, Bitcoin needs to stay above the 100-day MA and form a nice solid base there to propel itself to climb back over the 200-day MA.

Granted, the last few days of price action has been a little difficult to track for traders. Multiple resistances on the upside means sellers are firmly in control and each rally will be sold into pushing the price further down. The support zone between $40000 and $43000 should hold to arrest further slide in prices.

The relative strength index (RS) wading into the neutral level (below 50) also reflects a definite loss of momentum to the upside, which is a sign of immediate trouble.

Trade with confidence

Trading any asset in a range bound market is not as easy as you imagine because the sellers and buyers are usually in firm control of the region they’re watching over and they do their best to make sure they don’t give an inch away. Although it looks like a short bearish phase has set in and a deeper pullback may be in the offing, April and May are usually seasonally strong periods for risky and speculative assets namely equities and cryptocurrencies. And that means buyers could muster up enough support to drive the price upward, leading to a minor shift in trend. New to trading crypto? Quite don’t know how to navigate the range bound market? You can still increase your win rate while keeping your risk profile down to a minimum, if you have a solid automated crypto trading bot like Bitcoin Evolution. 

Designed to give traders an edge in the market, these bots are run by powerful algorithms which comb through the market round the market and place trades at the opportune time adhering to the rules laid out. Sophisticated data analysis systems and predictive algorithms work in tandem to make the whole trading process easier. There are many benefits to trading a ranging market with the help of a bot. What are you waiting for? Hop on the automated trading bandwagon and get your crypto trading started.