The Big Picture for Bitcoin Is as Bright as Ever

•  The cryptocurrency market dipped even further over the weekend but reversed and regained ground, as it looks like the recent correction is over.

•  Bitcoin (BTC, Tech/Adoption Grade “A-”) dipped all the way to $43,000 on Sunday but is trading around $48,000 on Monday.

•  Ethereum (ETH, Tech/Adoption Grade “A-”) slid all the way to $1,300 yesterday but is up nearly 10% today.

We’ve warned that cryptocurrency corrections can be sharp and sudden. They can come out of nowhere, and they can end just as quickly. The market took such a spill last week, free-falling on Monday from highs near $57,000 all the way down to around $43,000 on Sunday. That’s about a 25% drop over the span of seven days.

However, today, we’re starting a new week with a 9% gain, as Bitcoin, tapping on the resistance level of its 21-day moving average, seeks to end this recent dip. If Bitcoin manages to close above both its moving average and the psychologically key $50,000, the bulls will regain the control of the market.

Today’s an important test for both Bitcoin and the broader market, but we won’t be able to officially clear any worries of further downside until we see BTC close above those levels three days in a row.

Here’s BTC in U.S. dollar terms via Coinbase:

Ethereum fared slightly worse over those seven days, dropping more than 35% from highs set on Feb. 20 all the way down to about $1,300 yesterday. It’s also trading up about 9% today, but ETH has a way to go to push back above its 21-day moving average.

The bears are still in control of the No. 2 crypto asset, and ETH will need a strong week to change that. Also, ETH tends to set the trend for the altcoin market at large, and until ETH closes back above $1,800, there will likely be volatility in that sub-sector.

Here’s ETH in U.S. dollar terms via Coinbase:

ChainLink (LINK) set highs just under $37 on Feb. 20 but swiftly dropped to as low as $21 on Feb. 23, a slide of more than 40% in just three days. It’s regained ground all the way to $27 today but is still trading below its 21-day moving average.

The bulls will look to push LINK back above $30 and that moving average this week, which would signal an end to the recent dip.

Some news that might help the Link Marines out on this mission is the fact that BlockFi will begin offering interest-bearing accounts for ChainLink starting tomorrow with a 5.5% annual yield.

It’s bullish news to kick off an interesting week for the asset.

Here’s LINK in U.S. dollar terms via Coinbase:

Notable News, Notes and Tweets

•  Despite the recent price correction, Travis Kling points out that last month was filled with bullish news for the crypto market.

•  Shark Tank investor Mr. Wonderful has finally capitulated and joined the crypto movement, allocating 3% of his portfolio to a mix of BTC and ETH.

•  The non-fungible token (NFT) market has absolutely exploded, although there are concerns it’s due for a correction.

What’s Next

The volatility of the cryptocurrency market can throw off a lot of investors. Those who are armed with the right market insights can take advantage of market volatility, buy at a discount and execute excellent swing trades.

Crypto had been on a red-hot tear coming into last week, and it was overextended. The recent correction is a healthy development, as it allowed the market to cool and the bulls to regroup for the next push higher.

As we look forward to the week ahead, the first important thing to watch will be whether Bitcoin, which inevitably leads this market, can close above $50,000. The next sign is if Ethereum can follow and close above its 21-day moving average. The last thing to look for is major altcoins regaining their moving averages. 

Although initial recoveries after swift corrections can also be very fast, it may take a few weeks before we test previous all-time highs. Either way, this is an important week to gauge the intensity of the longer-term bull market.



About the Crypto Analyst

Alex has been actively researching and investing in cryptocurrencies since 2017. He contributes research and reports to several Weiss crypto publications, with a primary focus on helping to create crypto trading strategies.

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