After suffering a weak start to the new year, here is the Bitcoin short term forecast that could be helpful to evaluate in short term Bitcoin trading. Bitcoin price came back strongly in February and March to erase all its losses for 2022.
One of the reasons that boosted market sentiment in the past few days has been the Bitcoin purchases by the Luna Foundation Guard, a nonprofit organisation around the Terra blockchain. The wallet held by the Foundation has amassed 30,727 Bitcoin, which makes it the third-largest disclosed Bitcoin treasury, behind MicroStrategy and Tesla.
MicroStrategy is not satisfied with its Bitcoin stash. A subsidiary of the business intelligence firm has taken a loan of $205 million for purchasing more Bitcoin. The loan was collateralised with $820 million in Bitcoin held with MicroStrategy.
Bloomberg Intelligence Commodity Strategist Mike McGlone said in an interview with Yahoo Finance that Bitcoin caught the attention of the people in the past few days because it never stopped trading but nickel did not trade for a couple of weeks after its breakdown. This highlighted Bitcoin’s resilience. McGlone also added that Bitcoin was showing “divergent strength” compared to NASDAQ and he expected it to continue.
While Bitcoin has managed to erase its losses in short term for the year, the main action seems to be in the small altcoins. In its weekly report, Arcane Research said that Bitcoin, the large cap and the mid cap indexes have all risen between 8 to 11% in March but their gains have been dwarfed by the small cap index which is up 40% during the period.
With select altcoins shining, let’s study the charts of the five cryptocurrencies that are showing a positive chart structure and information for Bitcoin short term forecast.
DOT/USD Market Analysis
Polkadot has been trading inside a large range between $16 and $23.20 for the past several days. The bulls tried to push the price above the overhead resistance in the past few days but could not sustain the higher levels.
This suggests that bears continue to defend the overhead resistance with vigour. However, the 50-day simple moving average (SMA) has flattened out and the relative strength index (RSI) is in the positive territory, indicating that bulls have a slight edge.
If the price rebounds off $20, the bulls will again try to propel the DOT/USD pair above $23.20. If they succeed, the pair could rally to the 200-day SMA and then to $31.32.
Contrary to this assumption, if the price turns down and breaks below $20, the pair could drop to the 50-day SMA. A bounce off this level could keep the pair range-bound between the 50-day SMA and $23.20 for a few days.
VET/USD Market Analysis
VeChain has made a sharp recovery from $0.044 on March 13 to $0.089 on March 31. This rally had pushed the price into the overbought zone, indicating that bulls are in control.
The VET/USD pair is facing selling at the 200-day SMA, which has started a correction. If the price rebounds off the 38.2% Fibonacci retracement level of $0.071, it will suggest that the sentiment remains bullish and traders are buying on every minor dip. That could increase the possibility of a break above the 200-day SMA.
If that happens, the pair could rally to the psychological level at $0.10 where the bears may again pose a strong challenge. But if bulls overcome this barrier, the pair could surge to $0.125.
On the other hand, if the price slips below $0.071, it could drop to the 50% retracement level of $0.066 and next to $0.061. The greater the fall, the longer the time needed for recovery.
LUNA/USD Market Analysis
Terra’s LUNA token soared to a new all-time high of $111.52 on March 30 but the bulls could not sustain the momentum.
This may have attracted profit-booking by the short-term traders, which has pulled the price to the psychological support at $100. This is an important level for the bulls to defend.
If the price rebounds off the current level, it will suggest that bulls are attempting to flip this level into support. That will enhance the prospects of a resumption of the uptrend.
If bulls drive the price above $111.52, the LUNA/USD pair could rally to $125 and later to $150.
AAVE/USD Market Analysis
Aave broke above the downtrend line on March 29, indicating that the downtrend may have ended. The bulls pushed the price above the 200-day SMA on March 30 but the long wick on the day’s candlestick suggests that bears are attempting to stall the rally at this level.
However, a minor positive is that the bulls are not allowing the price to slip back below the downtrend line. This indicates that the bulls are attempting to flip the breakout level into support.
If buyers drive and sustain the price above the 200-day SMA, the AAVE/USDT pair could pick up momentum and rally toward $300. The bears are likely to mount a strong defence at this level but if buyers clear this hurdle, the pair could rally to $350.
This positive view will invalidate in the short term if the price turns down from the 200-day SMA and breaks below $200. That could attract profit-booking from the short-term traders who may have purchased at lower levels. The pair could then slide to $175.
EOS/USD Market Analysis
EOS rallied sharply from $1.88 on March 14 to $3.22 on March 28. This sharp rally pushed the index into the overbought zone, indicating that bulls have the upper hand.
The bears are posing a strong challenge near the downtrend line. This is an important level for the bears to defend because the 200-day SMA is also close to the downtrend line.
If the price turns up from the current level, the bulls will make one more attempt to push the price above the 200-day SMA. If they succeed, the EOS/USD pair could extend its up-move and reach $4.50.
Conversely, if the price extends its decline to $2.50, it will suggest that the bullish momentum has weakened. That could keep the pair range-bound between the 50-day SMA and the downtrend line for a few days.
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