Bitcoin (BTC): the level of volatility falls, framework conducive to technical rebound

The bitcoin price is in technical rebound from a level of long-term support. What objective envisaged for the rebound?

Key technical factors of the article:

• The bitcoin price recorded a volatility record since the fall of March 12, greater than 2018. This excess is being corrected, the market is holding its technical rebound.
• In terms of technical analysis of BTC / USD, the price rebounds from a long-term support, a chartist trend line straddling 2018/2019.

For about 24 hours, the international financial markets have entered a sequence of rebound, a technical recovery largely linked to the expiration day of this Friday, March 20, 2020, the "four witches" day.

For the institutional traders, it’s mainly about looking at the next monthly installment on the options market and to a lesser extent future contracts. Should the PUT options (bearish strategy on the underlying price) be cashed in or extended for the next month, or even switch the open position to CALLs (bullish strategy)?

After 40% drop in the price of CAC 40 in one month, it seems that professional and managerial traders are choosing to secure gains, to replenish the liquidity that is so sorely lacking.

In order to consider a stable technical rebound, it is necessary to observe a drop in volatility indicators. The implied and historical volatilities of several asset classes are falling after a month of sharp increases and that of the Bitcoin retreats after reaching and even exceeding its 2017/2018 record; a signal of the return of institutional investors? Too early to say.

In all cases, technical analysis highlighted strong support between $ 4,200 (upward acceleration threshold of April 2) and $ 5,000 (upward chartist trend line straddling the years 2018 and 2019).

Read also : Bitcoin and cryptocurrencies not safe havens? Too early to say

After the bearish shock of the session on Thursday March 12 which suggested the worst, the technical damage is therefore limited and the market could erase the decline of March 12. The uptrend line mentioned is shown in the two graphs below, that in Japanese weekly candles then that in daily; it produced its bullish effect with relative precision.

Bitcoin price weekly chart

Conclusion : It is not yet known that the ultimate market trough has been registered, but the technical rebound still has potential. First of all, the $ 7,000 (Kijun-sen daily, ichimloku system), $ 7,100 and $ 7,600, the latter being the threshold for dropping out of the crash session on Thursday, March 12. Invalidation of the rebound under the support at $ 5900.

Btc / usd price in Japanese candles daily

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.

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 swings