1. Bad news didn’t make the market drop even slightly, this is very different compare to early 2018 where any insignificant bearish news will cause the market to drop significantly. And there is no shortage of bad news recently such as more uncertainty around Tether, the delay of widely anticipated Bakkt launch, CBOE discontinuing Bitcoin futures temporarily etc.
2. Fundamentals are improving everyday especially in US. Cambridge Associates, the biggest pension and endowment fund advisor recently recommended these ‘real money’ investor to start exploring this space. These are the typical long-only institution that will create genuine buying pressure once they start coming in. Fidelity, one of the largest investment managers recently just rolled out their custody and trading execution service recently and been on-boarding clients steadily.
3. From technical point of view, Price have been testing 4k to 4.2k resistance for the 5th time since we are trading between 3k and 4.2k range. The more often a support/resistance is tested, the weaker it is. It is very likely to breakout from this level by early April. This will mark the first higher high and lower low since the bear market begins. That will serve as a major confirmation that the bear market has ended.
4. Downtrend have slowed significantly after the drop to 3.1k. From Bitcoin’s 10 year history, we can see that it’s an asset class that exhibit a very strong and obvious trend both on upward and downward basis, in this sense Bitcoin’s price behaviour is very similar to one commodity we are all very familiar with – crude oil. There are cycle and it often trend with a very strong momentum. From the chart below, Bitcoin seems to be having a trend reversal, it is trading above 100 days moving average for month than a month and stop making lower low since the breakout from mid-February.
5. Many smaller crypto have made a triple digit percentage return over the last few weeks, with most of them listed on Binance, some recorded +600% return in 3 days. This is an evidence that risk appetite have return to the market again.
Chart above shows Bitcoin/USD 4hourly chart overlay with Moving Average and RSI, noticed the red line which is the 200 period MA have been holding as a support every time since we breakout from 3.3k at 8th of Feb. I will be looking at $4650 level after we breakout from $4200 level as that's the 200 daily moving average, one of the most significant resistance from technical perspective.
For traders looking to enter now, SL will be at $3850 with TP1 at $4,230 and TP2 at 4,650.
While I can’t be 100% sure that we are out of the wood and bear market have ended, I think we are likely past the worst point of this bear market and expect to see some medium term reversal soon.