BTC Weekly Outlook Report- 28th March, 2022
Bitcoin 1W chart outlook
Last weeks Bitcoin’s weekly close was really bullish and a positive price-action for the following week was absolutely expected and we saw that kind of price action develop in front of us. Bitcoin managed to break quite a lot of major resistances on my 1W chart (exchange: CoinDCX) which was delightful to say the least.
Breaking the $42,000 level and making it into support was a super Resistance:Support flip move from the bulls. Currently the price consolidating above the $44,000 level is a positive sign as well.
Note: Price consolidating above a resistance is always bullish and will give price the required push for the next higher levels.
The current weekly is looking to close like a bullish engulfing candle and has just paused below the Upper Area of Supply Demand Zone (red box), also if you zoom-in, you will see that the 20 MA (purple line) is now acting as resistance on the 1W chart and the 50 MA (green line) is also coiling up. Monday will either be a good show of strength or a pullback.
Though we did not get a daily close above $45,500, but the 11% gain in price was a 2% improvement on the previous week and that means we have seen a 20% rally over the last two weeks (chart below)
Now comes in the big playbook, whether we can have a third positive week in a row. This would be a super bullish signals all over the charts, because we have not had 3 consecutive green weeks since November, 2021.
Now moving on to the indicators – RSI and stochastic RSI – we can see the bullish momentum and also how much room they have left to run should they sustain the bullish momentum.
Seeing the formation of the last two weekly candles (if this weekly candle closes like a bullish engulfing one), there is absolutely no point to have a bearish bias any longer. Conservative traders should still wait for a daily close above $46,000 level. This is because as mentioned in my previous BTC reports as well, I want the price to successfully break the Supply zone above.
If price follows the above levels successfully, then $51,000 looks like a high probability.
Bitcoin 1D chart outlook
The 1D chart shows us a much more clearer price-action and we can dive deeper into more technicals.
Right now Bitcoin is a technical analysts dream:
- Consolidation in a wedge
- Price supported by the 20 & 50 MA
- Breakout from wedge with volume
- Price paused by the 200 EMA
When price managed to reclaim the $42,000 level and then hold above it, we will almost always visit the high of that range. In this context it is the $46,000 level, which also happens to be the next resistance level. The current price range indicates that price is pausing and this could be a buyers exhaustion. The coming week will be super crucial to say the least.
Currently in the above chart, BTC is facing a roadblock by the 200 EMA (yellow line), which is always a strong resistance when price trades below it. Should the 200 EMA reject the price, we will revisit the pink trend line and test that as support ($42,920) and then we have the 20 & 50 MA as supports next, but that won’t be good for the bulls.
Something worrying on such a move is the sustainability of this move. It’s quite parabolic in nature and does not look good without a pullback. This is my personal bias as a trader, but it’s always great to be cautious.
Another sign of caution would be the loss of $42,000 level on our way down. This would paint a huge doubt on the bullish macro structure and may lead to a bigger and aggressive market sell off. Something we absolutely want to avoid after such a beautiful move up.
Also the long upside wicks on the above chart (red circle) almost match those of the previous swing highs failures before price plunged and fell to support. The current wicks are not as extreme as the previous ones, but should todays candle close as it is currently forming, then that would be a bearish close on the daily.
Monday will be a great indicator as the US stock market opens and that always has a huge impact across all asset class. If the market sentiment remains bullish, we will see more inclination towards risk-on assets and Bitcoin will easily get a push to break above the $46,000 level.
Something also interesting to note is that Terra foundation is still buying a lot of Bitcoin for its $UST reserves and if the buying pressure remains intact, we will see green for a few more days, but if this rally is only back by the Terra foundation, then things can get ugly real quick.
If the markets opens with a risk-off appetite, then a downside move could be on the cards.
Bitcoin 4H chart outlook
We can see the rising wedge and how the bottom of the wedge has supported price all week. A breakdown from the rising wedge would give us a measured move to $42,310 level and below that we could look at the 200 EMA for support around the $41,350 level.
If we get to see a pullback from here, followed by a bullish consolidation, then we might accumulate enough energy for another rally to the upside, but after consecutive green candles and the only bullish news being the Terra foundation, I would preferred having my risk management in place rather than being all-in.
In conclusion, we cannot have a monthly closing where price struggles to break $46,000 level and set a third swing failure. Neither can we have price lose important support at $42,000 level. The daily candle opening on Monday at 5:30am IST will be a huge indicator on the direction of price.
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.