Bitcoin (BTC): immediate technical scenario and sources of the increase in volatility

The Classes of Bitcoin came back with a high volatility on the $ 8,500 support, for a combination of technical and fundamental reasons. What will be the continuation of the trend?

Key technical factors of the article:

• The bitcoin price broke support at $ 9,500 and fell volatile to $ 8,500, the first technical frontier between the bullish scenario and the short-term bearish scenario.
• Several fundamental and technical sources explain this increase in volatility on the price of the first cryptocurrency on the market.

The market broke this week, with a significant rise in the volatility, support at $ 9,500 before stabilizing last night on the key technical threshold of $ 8,500.

There are several reasons for this drop of $ 1,000, they are technical and fundamental.

Let's start with technical explanations :

• 50% increase between the low point of December 2019 and the high point of February 2020, a phase of profit taking may seem logical especially in the current market environment, "stressed" by the epidemic of Coronavirus Covid-19.
• The $ 10,300 is an extreme technical resistance (see previous posts).
• The rise in the Shanghai stock market (SSE Composite index) may have led some Chinese savers to arbitrate in the short term against the BTC. (There are now more new Covid-19 cases worldwide than in China).
• Institutional traders remained "net sellers" under extreme resistance at $ 10,300 according to the COT report of the CFTC, the regulator of future contracts in the United States.

A fundamental reason is identified:

No panic in the long term, the underlying trend remains naturally upward and the prospect of Halving (halving the mining rewards on the Bitcoin network), in around 70 days, is a supporting factor. The Blockchain and the crypto-currencies are in no way threatened in their structure by the Coronavirus.

On the technical plan, the monthly closing of this weekend will make it possible to make a stock market forecast for the month of March; it takes place Friday for the future contract and Saturday February 29 for the classic BTC.

In the short term, it is imperative to bounce on the weekly support at $ 8,500, this is the border between the bullish and bearish scenario for the next few sessions.

Follow Vincent Ganne on Trading View for further analysis on the financial markets. The technical thresholds and the trend indicated above are based on the technical approach "price, momentum, sentiment, ichimoku". The data come from Bitstamp and the graphics of TradingView. You can consult the history of our technical points on cryptocurrencies in click here.

This content is offered for informational purposes only and does not constitute an investment recommendation. We remind you that theinvestment in crypto assets, including Bitcoin, is extremely risky. Cryptocurrency prices are prone to large and unpredictable price movements.