Past two days were tensed for cryptocurrency market players:
Bulls having losses or keep funds locked in trades
Bears had several liquidations due to sudden bounces
Who favors from such price action? Literally both sides!
Bulls could close long positions at Widening falling wedge near with $54 815 level and accumulate strong assets with a 30% discount once Triple bottom line was formed
Bears could open short positions at Widening falling wedge confirmation point and close it at the support
Why did Bitcoin price fall? The main and essential reason is continuous and uncorrected upward price action.
Market players expected correction since entering $44 000 - $48 000 zone however price was pushed directly to $58 000. Thus everyone was aware of drop and here came the trigger Elon Musk's claim "...Cryptocurrencies are overvalued". Exchanges' Bitcoin reserves have been increased sharply and then massive sell off began.
Is the correction finished? Strong positive fundamental news were received today
Square increased Bitcoin holdings with a new $170 million investment. Around 3 319 BTC were purchased at an average price of $51 236 per coin
MicroStrategy purchased approximately 19 452 BTC at an average price of $52 765 per coin
It can be concluded Bitcoin price action is now stabilized and have a solid support formed by institutional investors
What should be expected next? Technical and Fundamental analyses reveal the most probable scenario: Price action should retrace to $45 179 level where horizontal parallel range (Blue parallel channel) will be formed. Bitcoin should not break it below due to Square and MicroStrategy purchases made today. The price action will accumulate power and consolidate to retest upper edge of the range around $51 496. There is a high probability of subsequent breakthrough and testing of $62 000 area
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DISCLAMER: Information is provided only for educational purposes. Do your own study before taking any actions or decisions.
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The most natural price action scenario scenario is drawn in the main part of the analysis. Although the market is highly manipulated and based on this there can be up to 4 possible scenarios
[B]Let's take a deeper look at the possible scenarios.[/B]
Green scenario (I) - the price action is forced upward due to expiration of Option contracts with $58 000 strike price and recent purchases made by Square and MicroStrategy. The price is pushed up to the Triple top parallel channel (Blue line) line where retraces to Ascending parallel channel (Purple line) finishing Inverted Head and Shoulders (IHS) pattern which can be seen at 15 minutes chart: When the pattern is completed Bitcoin should start moving towards 63k zone. This is the most positive scenario
Orange scenarios (II - III) - price action rejects IHS and breaks down the parallel channel (Purple line). In this case the price should have a bounce from the former resistance Widening Wedge line which in a good scenario leads to local sideways Trading Range retest (Scenario II) or in a bad scenario leads to confirmation of the Parallel Trading Range formation. Both scenarios are positive and lead to long-term growth at current moment
Red scenario (IV) - the most natural price action which is discussed in the main part of the analysis. The price confirms Trading Range pattern and creates sideways trend. This is also a positive scenario which leads to long-term growth but with a longer time frame duration
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The most positive scenarios remain valid! Price action forecasts are displayed at the chart below:
It can be seen that the most positive scenarios remain valid after a confident upward pressure from market players. It is very probable that some of institutional investor started to accumulate the position. In case tomorrow we receive news about it we can be sure that upward has just started!
Elon Musk seems to start a Bitcoin investing challenge for other companies :)
Best regards, SkyRock Signals team
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Bitcoin's price action has just broke above of the Parallel Trading Range (Blue lines) after. Strong resistance of $51 400 level has fallen with at the 4th attempt to go higher.
It seems the price should return into the Ascending channel (Purple lines) and continue the uptrend in case it succeed to consolidate above the Trading Range. In the opposite scenario the price action can retrace to the Range again but with a high probability will blast upward after a short sideways trend
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Final part of the analysis reveals fundamental reasons of current decrease, so let's start!
Bitcoin Options with strike price $48 000 expire today. It seems powerful bearish pressure was made by those who issued these options. The first cryptocurrency rushed $50 000 - $60 000 area very fast and could go much higher. Institutional players did not want to sell Bitcoins at such a low price on February 26th in such conditions
They could easily conduct the manipulative sell off which we saw at CryptoQuant chart when a lot of transactions with 350 BTC value each were sent to exchanges to be sold. Moreover we saw many positive fundamental news during last days a lot of companies entered or accumulated Bitcoin holdings however the price increased insignificantly and soon was pushed back to $48 000 zone.
The most probable scenario is that price action will be pushed below $48 000 today and it seems its target will be $45 450 level which is displayed at the chart. This level will finish Trading Range formation while expiration of options should eliminate institutional bearish manipulations and pressure
We will accumulate Bitcoin holdings starting from current level and until $45 500 zone. The growth should start within next days. Keep strong guys and leave your comments for discussion