BTC Daily Report: 30th March, 2022
BTC 1D chart outlook:
Finally my area of confluence is playing out on the charts. After 8 consecutive daily green candles, we finally had a red candle closure on 30th March, 2022 and exactly within the Upper area of Supply zone.
This zone intersecting with the Major Resistance (pink line) at the swing high of $48,300 will be a very tough test for Bitcoin. Even on the volume profile I am not seeing any major candles to support price action currently. The reason I stayed away from trading this market was the single catalyst news of Luna Foundation buying BTC for their UST reserves.
Diving deeper into technicals, Bitcoin is holding above a super important support level at $45,200. This level is of primary importance because it was previously a resistance for the price which has now been flipped into support. The bullish parabola that BTC price witnessed recently without any retest of major levels means that the $45,200 level cannot be confirmed as support, because it never really saw a pullback and bounce from there. If we go by current price action, we might see a pullback at that level and we will need to assess how price reacts there.
Corrections/pull backs allow market structure to remain intact and gives most indicators a time to cool off. When price goes up or goes down too quickly it can reverse on the other side just as fast. If we look back to the previous Support:Resistance level at $42,500 we can see the price reactions there multiple times. Price ascend or descended through the S/R level violently and came back just as fast.
Consolidation and sideway movement of price is healthy for further price development to take place and that is exactly what we want to see developing. Does not matter if the range is current price levels or at lower levels, but a steep increase within a parabolic structure is NEVER sustainable.
On the above 1D BTC chart we can clearly see my three points of interest for BTC:
- Support 1- This is a very minor area of support, and a pullback here with aggressive sellers in the market, I don’t really expect this level to give us much support or bounce back. This is also the $42,000 area of previous resistance and will be super important for us in this run
- Support 2- This area can be considered a major support level and is at $40,326. A pullback till here would still keep us within a healthy bullish price structure
- Major Support- This would be like the last stands for the bulls and price breaking this support would not only erase all the gains of current run up, but will also destroy the bullish structure we are currently trading in.
Bonus supports- These are the 200 EMA (yellow line) and the 20 & 50 MA below that, they might also provide good support and bounce back if we start to trend downwards.
BTC 4H chart outlook
On the 4H chart we can clearly starting seeing price exhaustion and this pause is happening just below a major resistance (pink line). If you are trading on a clear chart and seeing the recent price pump, you would be tempted to long, but seeing the current price consolidating just below resistance, it would not be very wise to open new positions currently.
Another thing I would not like to see is, but is happening on the chart is the 20 MA (purple line) has coiled up above the price and will not start acting as resistance.
The red box in which price is consolidating is the area in which I expected sellers to step in and put bearish pressure on the price. This I had pointed out in my previous BTC reports as well.
A slower price action towards the upside is more sustainable than the parabolic moves we witnessed in the last couple of weeks, especially when the market sentiments were still in FEAR and there was not many bullish news. This would be very different in a full-fledged bull run, but currently we cannot say we are in one.
The rising wedge which is often a bearish pattern, but the one we charted flipped into bullish continuation and we saw price breakthrough a major resistance of $45,000 level with a huge green candle.
The above chart has the Fib ratios plotted and they go really well with my area of interests. The 0.236 fib ratio is also confluent with my first area of support (green horizontal trendline) at $42,447.
BTC 1H chart outlook
The 1H chart is full of noise and choppy price action. No patterns being formed or clear direction to follow. This choppy sideways action can be expected after a huge move up/down, so it’s really not surprising seeing BTC behave this way.
Price action here also shows the multiple rejections in more detail. We can also see our Major resistance (pink trend line) acting as a barrier to price. Also the Supply Area (the blue box) is where price is consolidating and this gives us a hint that traders maybe booking their profits for the time-being.
Any pullback/correction here would be healthy and give the indicators (RSI, Stoch RSI) a cool off period and make price gain enough momentum for another leg on the upside. Currently price is curving towards the downside and with the lower-highs forming on the 1H chart, we are facing bearish pressure at the moment.
Price should not break below the Supply area box and even if it does, it should hold above the $45,000 level after a retest. Losing the $45,000 level would leads us to a deeper correction than anticipated.
Bitcoin Closed as a Doji candle on the Daily chart and perfectly retested the $46,500 support (minor). Tomorrow- 31st March, 2022 we will have the Monthly closing and the market will experience a high level of volatility as large positional traders close positions for tax reasons as well as an expiry of Options. These position closing can bring quite a strong downward momentum and risk management will be your saving grace.
Currently we require a breakout above $48,200 level and set a higher high. Also TA wise we need to overcome the pink horizontal trend line on the chart and hold price above it as support to break the daily range.
A huge thank you to CoinDCX for giving me this opportunity to write such a detailed report and be a part of the #CoinDCXpathbreaker program, enabling me to share such knowledge with everyone in the crypto space