Block Journal
No Result
View All Result
  • Login
en English
nl Nederlandsen Englishfr Françaisde Deutschit Italianopt Portuguêsru Русскийes Españolth ไทยzh-CN 简体中文hi हिन्दीja 日本語
  • Home
  • News
  • Crypto
  • Markets
  • Investing
  • Glossary
  • Videos
  • Charts
    • Crypto
    • Forex
    • Stocks
    • Commodities
  • Magazine
Magazine
Newsletter
  • Trending Now
  • Bitcoin
  • Altcoin
  • Ethereum
  • Analysis
  • Blockchain
  • Metaverse
  • NFT
  • DeFi
  • Web3
  • GameFi
  • ICO
  • Legal
  • Security
Block Journal
  • Home
  • News
  • Crypto
  • Markets
  • Investing
  • Glossary
  • Videos
  • Charts
    • Crypto
    • Forex
    • Stocks
    • Commodities
  • Magazine
en English
nl Nederlandsen Englishfr Françaisde Deutschit Italianopt Portuguêsru Русскийes Españolth ไทยzh-CN 简体中文hi हिन्दीja 日本語
No Result
View All Result
Block Journal
No Result
View All Result
  • News
  • Crypto
  • Markets
  • Investing
  • Videos
  • Charts
Home Crypto Bitcoin

“Oversold” Bitcoin Bounces From 200DMA & Realized Price – Where Next for BTC as Bank Crisis/Fed Tightening Jitters Rock Sentiment?

News Room by News Room
March 11, 2023
in Bitcoin
Reading Time: 4 mins read
0 0
A A
0

After falling another 1% on Friday to take its week-to-date losses above 10%, Bitcoin (BTC) is now oversold, according to the widely followed 14-Day Relative Strength Index (RSI) indicator. BTC/USD was last changing hands in the $20,100s, having dipped as low as the $19,500s earlier in the session, with its RSI last just above 28.

An RSI score of less than 30 is widely viewed as indicating that market conditions have become oversold in the short term. Meanwhile, an RSI score of above 70 is viewed as indicating market conditions have become over-bought.

The last time Bitcoin’s RSI fell below 30 was in the immediate aftermath of the collapse of cryptocurrency exchange FTX back in November. Bitcoin’s RSI entering oversold territory is often a lead indicator that a recent sharp drop may be about to end and a period of consolidation at lower price levels may be incoming.

Bitcoin’s RSI falling into oversold territory comes after a so-called “bearish divergence” earlier in the year. This is where the RSI starts posting lower highs, despite prices remaining in an uptrend.

In the most recent example, Bitcoin’s RSI hit a high of 86 on the 13th of January when BTC/USD was just breaking above $20,000, before continually posting lower highs as the Bitcoin price advanced above $25,000 over the course of the next few weeks.

Some traders view a bearish divergence of the RSI with the underlying price as an indicator that bullish price momentum is waning. And that certainly seems to have been the case in the last few weeks.

200DMA, Realized Price Offer Vital Support

Bitcoin’s bounce back above the $20,000 level on Friday suggests appetite in the market to defend the key 200-Day Moving Average and Realized Price levels in the $19,700-800 region remains strong.

For reference, the Realized Price is an on-chain metric, calculated by taking the average price at the time when each circulating Bitcoin last moved – it’s a proxy for the average price the market paid for each Bitcoin.

Both levels are widely followed by cryptocurrency and traditional asset investors alike. A decisive break above these levels, as happened earlier in the year, is seen as a strong sign that the market’s near-term momentum has shifted in a positive direction.

Conversely, failure to break above the 200DMA (or Realized Price) can be viewed as a sign that the market “isn’t ready” to embark on a new bullish trend, and aggressive reversals are often seen. That was the case for Bitcoin when it failed to break above its 200DMA back in late March 2022.

Macro Headwinds Remain

Despite the strong bounce on Friday from key support, price risks remain tilted to the downside, as macro risks grow. US equity markets tumbled this week, led by an aggressive sell-off in bank stocks as two crypto/tech start-up-linked US banks (Silvergate and Silicon Valley Bank) imploded.

Both eventually succumbed to bank runs, with depositors (including many crypto and tech firms) worrying about the strength of their balance sheets. Silicon Valley Bank’s woes were worsened by a failed attempt to raise capital earlier this week that drew attention to the horrible state of its bond portfolio.

The risk of contagion to other small and medium-sized US banks remains elevated and this could keep risk appetite in stock and crypto markets on the ropes next week.

Friday’s not-as-hot-as-feared US jobs report and troubles in the bank sector have led markets to wind back Fed tightening bets, with a 25 bps rate hike from the US central bank later this month now once again the market’s base case assumption.

But next week sees the release of the February US CPI report. If this shows that the resurgence in price pressures seen in January continued to build in February, markets may once again be forced to price in a 50 bps rate hike later this month, as well as a possibly higher terminal rate.

That would be toxic for risks assets at a time when concerns are elevated about the impact of the Fed’s tightening efforts on the banking sector, and could worsen the contagion already being seen.

Risks Remain Tilted to the Downside

One area of concern specifically for crypto is USDC stablecoin issuer Circle’s reserves, a small portion of which were held at Silicon Valley Bank. At the moment, it seems as though all deposits will be made whole.

But if there is any inkling that the unfolding US banking crisis has caused Circle to lose some of its reserves, this could create a crisis in crypto as investors rush to sell their USDC.

For all of the above-noted reasons, as well as ongoing jitters about the ongoing crypto crackdown by US regulators (the NY attorney general this week argued that Ether is a security), risks remain tilted to the downside. If Bitcoin loses a grip on the 200DMA and Realized Price, a swift dump to the support-turned-resistance $18,200-400 area could be in store.

Read the full article here

ShareTweetSharePinShareShareSend

Related News

Significant Downside Move for Ethereum Against Bitcoin Looming, Says Benjamin Cowen – Here Are His Targets
Bitcoin

Significant Downside Move for Ethereum Against Bitcoin Looming, Says Benjamin Cowen – Here Are His Targets

September 21, 2023
Highly Anticipated FED Interest Rate Decision Released – Here is Bitcoin’s First Reaction
Bitcoin

Highly Anticipated FED Interest Rate Decision Released – Here is Bitcoin’s First Reaction

September 21, 2023
Bitcoin (BTC) Consolidates as UK Inflation Falls
Bitcoin

Bitcoin (BTC) Consolidates as UK Inflation Falls

September 21, 2023
Trader Issues Warning on Ethereum-Based Altcoin That’s Soared Over 300% in a Month, Updates Outlook on Bitcoin
Bitcoin

Trader Issues Warning on Ethereum-Based Altcoin That’s Soared Over 300% in a Month, Updates Outlook on Bitcoin

September 21, 2023
Crypto Influencer Projects $100,000 For BTC Amid Bitcoin ETF Frenzy
Bitcoin

Crypto Influencer Projects $100,000 For BTC Amid Bitcoin ETF Frenzy

September 21, 2023
Bitcoin Price Topside Bias Vulnerable If It Continues To Struggle Below $27.5K
Bitcoin

Bitcoin Price Topside Bias Vulnerable If It Continues To Struggle Below $27.5K

September 21, 2023
Bitcoin’s Next Move Up Will Be Explosive, Says Crypto Analyst – But There’s a Catch
Bitcoin

Bitcoin’s Next Move Up Will Be Explosive, Says Crypto Analyst – But There’s a Catch

September 21, 2023
Bitcoin Reserves On Exchanges Approaching A 6-Year Low, Good For Price?
Bitcoin

Bitcoin Reserves On Exchanges Approaching A 6-Year Low, Good For Price?

September 21, 2023
Bitcoin Gets Its Own Take on Social App Friend.tech
Bitcoin

Bitcoin Gets Its Own Take on Social App Friend.tech

September 21, 2023

Discussion about this post

Latest News

Coinbase’s cbETH Staking Generates 4% of Exchange’s Revenue

Coinbase’s cbETH Staking Generates 4% of Exchange’s Revenue

September 21, 2023
U.S. CBDC Efforts Opposed in Legislation Advanced by House Republicans

U.S. CBDC Efforts Opposed in Legislation Advanced by House Republicans

September 21, 2023
You can build your own Trezor but here’s the price: DIY wallet engineer

You can build your own Trezor but here’s the price: DIY wallet engineer

September 21, 2023

Global stocks fall on fears of more US interest rate increases

September 21, 2023
Friend.tech look-alike ‘Alpha’ emerges on Bitcoin network

Friend.tech look-alike ‘Alpha’ emerges on Bitcoin network

September 21, 2023
ADVERTISEMENT

Popular

  • Fed’s Williams: Expects inflation to decline to around 3.25% this year

    Fed Preview: Forecasts from 15 major banks, a pause, but the end of rate hikes?

    0 shares
    Share 0 Tweet 0
  • Basic Attention Token to implement KYC-free on-chain payouts

    0 shares
    Share 0 Tweet 0
  • We must stop climate solutions from killing biodiversity

    0 shares
    Share 0 Tweet 0
  • Ukraine steps up efforts to break Russia’s Black Sea blockade

    0 shares
    Share 0 Tweet 0
  • Bitcoin Onchain Data Show Bullish Undercurrents

    0 shares
    Share 0 Tweet 0
Block Journal

Block Journal is the world’s leading source in blockchain news and updates. Follow us to stay up-to-date with all you need to know in web3.

LEARN MORE »

Recent Posts

  • Coinbase’s cbETH Staking Generates 4% of Exchange’s Revenue
  • U.S. CBDC Efforts Opposed in Legislation Advanced by House Republicans
  • You can build your own Trezor but here’s the price: DIY wallet engineer

Trending Topics

AI Altcoin Analysis Bitcoin Blockchain Commodities Crypto DeFi Ethereum Forex Futures GameFi ICO Interview Investing Legal Markets Metaverse News NFT Security Stocks Uncategorized Videos Web3

Get Informed

The most important crypto and finance news and events of the day

Be the first to know latest important news & events directly to your inbox.

By signing up, I agree to our TOS and Privacy Policy.

  • About
  • Privacy Policy
  • Terms of use
  • Press Release
  • Advertise
  • Contact

Copyright © 2023 Block Journal - Created by Sawah Solutions.

No Result
View All Result
  • Home
  • News
  • Crypto
  • Markets
  • Investing
  • Glossary
  • Videos
  • Charts
    • Crypto
    • Forex
    • Stocks
    • Commodities
  • Magazine

Copyright © 2023 Block Journal - Created by Sawah Solutions.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.