Bitcoin Price Technical Analysis for March 20, 2016

Despite the price drop last weekend, this week has been a steady ride for Bitcoin traders. The market seemed test the $400 support line a few times but the bull pressure was too high to break below $400. Currently Bitcoin is trading at $409, with no significant trading volume traders as seemingly waiting on the sidelines cautiously for Bitcoin’s next move.

Earlier this month The Merkle published an analysis titled The Plot Thickens. Bitcoin’s price has been forming big triangle which over 5 months ago, concluding with a recent resolution. Many traders expected big movements in price but something went wrong. Specifically, the West and the Chinese markets are both in disagreement in regards to the big triangle. According to yolotrades from r/BitcoinMarkets:

Essentially China has a lower starting point to the triangle but a higher mid-point, causing a steeper angle on the bottom support of the triangle (or you could think of this inversely – the west’s line is shallower). I feel the markets are kind of divided over which is more important, if only because I was expecting some massive dumping if the triangle broke down. There’s no way to draw the triangle on OKC or Huobi without it being breached. However on all western exchanges the triangle is still in play.

A picture is worth a thousand words so here are the 2 triangles:

As you can see the two triangles don’t quite agree on when the breakout will happen, as a result we may see further deviation in price between the West and the East.

Bitcoin Price Bull Past

Because of the indecisiveness of the Bitcoin market, and the two year long bull markets, it seems that during times like these traders would rather hold no position at all then risk a short or a long when volatility hits. Furthermore, the waters are always quiet on the weekend and volume usually picks up at the beginning of the week when exchanges, traders, and merchants either convert or sell their Bitcoins that they couldn’t during the weekend when banks were closed.

Taking a look on trading view we can see further proof of indecisiveness in the market as the top 2 most popular posts are titled: BTCUSD in a corrective structure, and Blue Pill or Red Pill?

The second analysis called Blue Pill or Red Pill uses historic trading data to find some patterns. While it is quite an interesting observation most traders do not rely on simply previous patterns in order to enter a position, however a good point the analysis makes is that when plotting the EMA (Exponential Market Average) it looks like a support line which suggests a bull market ahead.

Plotting the 200 EMA indicator on our charts you can see that the market is above the EMA line, visit themerkle.com/price for more charts and indicators.

Bitcoin Price Indecisive, yet Strong

Overall, the Bitcoin market is at a very indecisive point. Depending on how you plot the triablge some may conclude that the breakout already happened, others may say that it may still happen. If no big negative news come out anytime soon, the market should safely hold the $400 resistance as it’s both an emotional and a technical support line which, if broken can lead to new lows as there isn’t much support below that line. On the other hand, if the triangle breaks above $420 which has been a resistance / support line for a few months, then a price upwards of $500 isn’t unobtainable.

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