Bitcoin threatens $38K as 3-day chart hints at March 2020 Covid crash repeat
Bitcoin (BTC) further tested $38,000 overnight as the weekend began with uncertainty among traders.
3-day chart could be “precursor” for weekly
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD circling $39,000 after several attempts to break $38,000 support.
The pair had also seen a brief spurt above $40,000 Friday thanks to geopolitical developments, this nonetheless lasting a matter of minutes before the previous status quo returned.
Such “fakeouts” to higher levels — which ended with Bitcoin coming full circle and liquidating both short and long positions — was already familiar behavior for market participants this month.
Now, however, lower timeframes were beginning to show signs that a more significant downtrend could be on the horizon.
“3 Day BTC candles are flirting with the 200 MA for the first time since the Covid crash,” analytics resource Material Indicators warned Twitter followers on the day.
“If this is a precursor to what the Weekly candle is going to do, make sure you have enough powder to take advantage of the buying opportunity that follows. That bounce can change your life.”
The 200-week moving average, currently just above $20,000 and still climbing, has acted as a historical bottom zone throughout Bitcoin’s lifespan and has never been violated.
Meeting it would require a drop of 50% from current spot price, and 70% from all-time highs — something which BTC/USD has nonetheless achieved in the past.
The Covid crash, for instance, saw a 60% dip in a matter of days before an equally strong reversal initiated a new price paradigm later in the year.
Bitcoin remained at the mercy of stock markets during the week, meanwhile, these trending down to cap 2.9% and 3.5% weekly losses for the S&P 500 and Nasdaq, respectively.
Previously, popular trader Pentoshi had stated plainly that he believed a Wall Street Crash-style event could take hold of markets this year.
Big and small BTC bets keep flowing in
On the plus side, whale buy-ins and smaller investor wallet growth provided reasons to be cheerful for long-term hodlers.
Related: Bitcoin derivatives metrics reflect traders’ neutral sentiment, but anything can happen
As Cointelegraph reported, 30,000 BTC left Coinbase Friday, while exchange reserves mimicked decreases seen in July and September last year — immediately before Bitcoin made significant price increases.
Big smart whale moved 24,000BTC today. Usually, transaction like this signify OTC trades. Good sign for $BTC pic.twitter.com/SLwmAGwotf
— whalemap (@whale_map) March 11, 2022
“10-100 BTC wallets are stacking like crazy, their supply is getting parabolic,” Lex Moskovski, CEO of Moskovski Capital, added about wallets, citing data from on-chain analytics firm Glassnode.
“These guys correctly sold the meat of the $10k-50k Bitcoin move.”
An accompanying chart showed that the proportion of the BTC supply now held by entities — one or more wallets assumed to have the same owner — now stood at its highest in a year.