The bitcoin price closed with more than seventy percent gains in the first quarter of this 2023being the second best performance in this period since 2014, according to Cryptorank data.
To know a little more in detail the technical aspects that supported this incredible performance in the price of BTC, we share a technical analysis of Martin UngarFounder of Latin Stake Pools.
BTC/USD:BITSTAMP
Bitcoin (BTC) closed the third consecutive month green for the first time since late 2020. Although February closed with a timid +0.04%, technically it is still a positive monthly close.
The most important thing to happen in March for bitcoin, however, was the bounce off the 200-day, 21-week moving averages that occurred the week of March 6. More specifically, on Friday March 10 and continuing through the weekend of March 11 and 12 when the United States Treasury decides to bail out banks with solvency problems.
The injection of money from the Treasury and the expansion of the balance sheet of the Federal Reserve marks a change of course in monetary policy. Although most economists still say that the Federal Reserve is continuing with its quantitative tightening (QT) plan, at least for bitcoin the pivot has already happened.
BNC:BLX/FRED:WM2NS
Many people continue to wonder if November 2022 was the bottom of the current market cycle or if there is still a chance to fall lower. Nobody has a crystal ball but there is a graph that can help us analyze the current situation.
This chart is the Bitcoin Liquid Index (BLX) divided by the United States M2 monetary base. It is a form of adjust the price of bitcoin for inflation or rather monetary expansion. What this graph shows is that the minimum of November 2022 corresponds to the monthly closing of June 2019 and January 2018. This is because a dollar today is worth less than a dollar in months past.
BTC/USD:INDEX
Bitcoin BTC is now struggling in a high resistance zone that sits in the $27k to $29k range.. $29k was an area of much support during bitcoin’s recent history. It was support in January, May, June, July 2021 and from May to June 2022. This support was broken in June 2022 and has therefore now become major resistance, which will likely take several attempts to overcome.
Looking at a shorter period of time, at 4 hours, a symmetrical triangle that has formed since March 22 is being followed. This formation threatened to break down with a target of $25k but quickly rallied and its target to the upside is $30.3k.
The daily RSI is currently 63 points below the 70 threshold, which marks overbought territory. On January 14, he had reached 89 points after the important rally at the beginning of the year. Then there had started to be a bearish divergence between the RSI and the price that continued to reach new local highs. However, on March 12, the RSI broke out of the downtrend it was in.
If bitcoin can break above the current resistance at $29k, the RSI has enough room to allow for a rally to $30k-$32k.
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