- Bitcoin (BTC) encountered massive resistance as it tried to break $7,300.
- At the same time, its trade volume has been dropping together with its dominance in the crypto markets.
In our analysis of Bitcoin (BTC) a few hours ago, we were cautiously optimistic that the King of Crypto was on a slow and tense journey towards $8,000. We also identified a few support zones that include $7,050, $6,900, $6,800 and $6,600.
Why $7,050 is the Level to Watch During Bitcoin’s Weekly Close
Further analyzing the aforementioned support zones, we realize that the $7,050 zone is the last area of defense for Bitcoin before it drops back to familiar levels below $7,000. Therefore, if this level breaks in the next few hours, we will most likely retest $6,900 and possibly back to our strongest support thus far of $6,600.
Revisiting our favorite 6-hour BTC/USDT we begin to spot a few areas of weakness for the King of Crypto that might cause some excitement for the Bears.
To begin with, Bitcoin’s move to claim $7,300 was rejected at the same zone which was a resistance. Its current price of $7,126 is still above the 50 (white), 100 (yellow) and 200 (green) moving averages. These MAs are acting as short term support for Bitcoin, but they are also giving a picture of exhaustion for BTC.
Further checking the trade volume, it has reduced drastically in the last few days. This is a tell-tale sign of a possible move down.
The MFI has a value of 80 thus indicating an overbought situation. This is further confirmed by the MACD about to cross in a bearish manner above the baseline.
Bitcoin Dominance Continues to Drop Slowly
In our April 17th Ethereum price analysis, we had identified that the BTC dominance had dropped by 1% thus providing some level of confidence for ETH to rise in the crypto markets. Rechecking Coinmarketcap, we find that the BTC’s dominance now stands at 63.5% compared to our previous level around 64%. This slow decline in market dominance could provide the perfect environment for a mini-alt season.
Conclusion
As the third week of April 2020 comes to a close, $7,050 will be the level to watch for Bitcoin (BTC). This area provides the last line of support for the King of Crypto before falling back to familiar territory below $7,000. Also to note, is that the Bitcoin trade volume has continued to drop thus providing the case for a bearish weekly close for BTC. Additionally, Bitcoin’s dominance has continued to drop slowly further pointing to a possibility of Ethereum doing well in the crypto markets along with alt-coins.
As with all T.A opinion, the reader is advised to use adequate stop losses to protect their leveraged positions on the various cryptocurrency exchanges.
Author: John P Njui
Read nore at: https://ethereumworldnews.com/why-7050-is-the-level-to-watch-during-bitcoins-btc-weekly-close/
