The trading volume on the crypto-market has been rising again for a few days now, bringing price gains for crypto currencies. This recovery trend could, however, only be the brief flare-up of a bear rally.
Anyone who has turned a blind eye to market events in the past four weeks and now wakes up dreamily from hibernation could think that the crypto market is showing its usual volatility. Nearly all crypto currencies are turning positive again under the market dominance of Bitcoin, and the current overall market capitalization does not initially suggest that the crypto market has left one of its blackest months behind. However, the shock of the corona crash is still deep-seated and is arousing mistrust about the current price developments. Particularly as the effects of the global economic crisis will have a delayed impact on the markets. The current rebellion of the crypto-market could therefore only be the expression of a bear rally, after which the financial markets could collapse again and with full force.
Undeterred by the possible scenarios in the market, the Bitcoin price continues to rise and has increased in value by almost 1.8 percent in the last 24 hours. Currently, the crypto reserve currency is quoted at 7,358 US dollars and is clearly up 14.5 percent compared to the previous week.
The Altcoins are also rising again. The ether exchange rate (ETH) has increased by 2.4 percent in a daily comparison and currently stands at 172.42 US dollars. The second-largest crypto currency by market capitalization was thus up 29.7 percent in one week. The ripple coin XRP is also rising significantly and has gained 2.5 percent in the last 24 hours. Nevertheless: In a weekly comparison, the XRP price increased by 14.6 percent. And also IOTA (MIOTA) recorded a plus of 1.8 percent in the daily comparison and could thus rise by 18.1 percent within one week.
B2C2: Strong rise in spreads in crisis March
The past March was dominated by the corona crash. After the Bitcoin exchange rate was still able to form its high at over 10,400 US dollars in mid-February, the price already dropped to just under 8,500 US dollars at the beginning of the month and headed straight for its low, which the largest crypto currency by market capitalization reached on March 13 at just under 5,000 US dollars. The drastic decline was the symptom of a huge wave of selling, under the pressure of which both the traditional markets and the crypto market collapsed without further ado.
The high volatility of the market has been reflected in the fluctuation range of purchase and sale prices of crypto assets. According to a recent report from B2C2, the spreads in OTC over-the-counter trading widened massively in March. Spreads refer to the bid-ask spread, the difference between the price an investor is willing to pay (bid price) and the price at which investors sell the asset (ask price):
On Thursday, March 12 and Friday, March 13, there were sharp movements in crypto prices, with a 50 percent deduction of Bitcoin over the 2-day period, the largest since 2013. Spreads between supply and demand widened as price uncertainty increased and liquidity providers withdrew from the markets,
the report says. On 12 March, the bid-ask spread on the reference exchanges examined rose to 200 basis points.
One of the Bitcoin exchanges even had spreads of over 500 basis points:
In other words, that's a 5% difference between the price an investor could buy at that exchange and the price an investor could sell at. On Friday, the spread between supply and demand on one of the exchanges broke through the 10 percent barrier.
The B2C2 research provides an interesting insight into the dynamics of the crypto-market during highly volatile phases and panic selling waves. Only exchanges and trading platforms were able to benefit from this, as they include the spreads.
Bitcoin Price: Technical Analysis
And the upward trend that the Bitcoin share price has been following since mid-March continues. Currently, the moving average of the last 50 days seems to be a resistance that separates Bitcoin from higher prices. If we look at the indicators, there is reason to hope that this resistance will also fall: MACD and RSI are rising and the Aroon-Up signal is also high. We therefore come to a bullish assessment and hold on to yesterday's trading recommendation:
Long Position: Those who are not yet in a long position can take advantage of the entry at $7488.38. Targets would then be at USD 7,988.78 and USD 9,153.79 and the stop loss at USD 7,212.23.
Short position: Entry if the case is below USD 6,737.36, Target at USD 5,856.00, Stop Loss at USD 7,212.23.
Daily and hourly charts based on the BTC/USD pair on the Bitstamp exchange.
On the hourly chart it looks like the consolidation we talked about yesterday is behind us. Although the price temporarily fell back to the entry level for the short position, it was able to bounce back from it. The price now has only one direction on the hourly chart: up. A glance at the indicators leads to a bullish assessment. The trading recommendations are the same as yesterday:
Long position: Entry at $7,455.77, targets at $7,636.00 and $8,154.40, stop loss at $7,338.13.
Short position: Entry for a fall below USD 7,087.46, target at USD 6,773.37, stop loss at USD 7,212.23.
