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Bitcoin regains support at $28,400 as Q1 nears its close
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(Kitco News) - Financial markets rallied on Wednesday as investors eye a positive close to the first quarter of the year amid the backdrop of a spreading banking crisis that has many financial experts wondering about the overall health of the global economy.
U.S. equities were higher across the board, which led to a positive finish for the major indices, with the S&P, Dow and Nasdaq closing up 1.42%, 1.00%, and 1.79%, respectively.
Data provided by TradingView shows that Bitcoin (BTC) bulls managed to lift the top crypto back above $28,700 in early trading on Wednesday, but stiff resistance from bears halted further gains, resulting in a pullback to support at $28,400.
BTC/USD 4-hour chart. Source: TradingView
The recovery in spot prices was mirrored in futures markets, with “April Bitcoin futures prices solidly higher in early U.S. trading Wednesday,” according to Kitco senior technical analyst Jim Wyckoff.
“BC bulls have the overall near-term technical advantage and are keeping alive a price uptrend on the daily bar chart,” he added. “The trend is the bull’s friend.”
For analysts at Eight Global, the one word that perfectly describes the volatility of the past couple of weeks without a major change in price is consolidation. “It is identified by sideways price action that moves in a specific area from low to high,” they wrote.
“As you can see the price has been moving in a sideways manner between $26.5K and 28.4K for one and a half weeks now. Two times we saw the price trading above the range high. Afterwards we saw a drop back down into the range which is a bearish sign. If the price is trading above or below the range, that phenomenon is called deviation.”
BTC/USD 1-hour chart. Source: TradingView
Eight Global recommended trading these types of ranges “level for level.” That means that as Bitcoin approaches the range high but doesn’t shoot through immediately, it signals an opportunity to short.
BTC/USD 1-hour chart. Source: TradingView
“Your first take profit area in this case should be the equilibrium of the range and the second one is at the range low,” they said. “If we get a retracement at these levels towards the equilibrium of the range first. Then you could look out for longs towards range high.”
For those who aren’t interested in playing the range trading game and just want a simple approach to investing in Bitcoin, Eight Global founder Michaël van de Poppe posted the following tweet highlighting the practice of dollar cost averaging.
Buying #Bitcoin at $28K might be expensive for your investment, but that's often because people let emotions get into play.
— Michaël van de Poppe (@CryptoMichNL) March 26, 2023
One small swing on the portfolio and people stop following their plan.
If you want to invest in #Bitcoin, just accumulate and DCA at these prices.
Altcoin rally extends a second day
The altcoin market benefited from the recovery of Bitcoin and saw its second straight day of widespread green for the top 200 tokens.
Daily cryptocurrency market performance. Source: Coin360
Solar (SXP) led the market with a gain of 54.64% to trade at $0.4844, followed by a 21.72% increase for Conflux (CFX) and an 18.96% gain for Celo (CELO).
The overall cryptocurrency market cap now stands at $1.186 trillion, and Bitcoin’s dominance rate is 46.3%.
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