Bitcoin Weekly Forecast: A rising tide lifts all boats

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  BTC/USD recovered some losses of the previous week.
• The cryptocurrency market is supported by improved sentiments.

This week has been no less violent than the previous one. Bitcoin's weekly range exceeded $2,000 as the first digital currency touched the low at $4,437 on Monday, March 16, only to show up at $6,951 on Friday. While the critical resistance of $7,000 remains unbroken, the price has successfully passed SMA200 weekly and cleared two psychological levels, which clearly an improvement from the technical point of view.

Bitcoin's market share jumped to 65.2%, while its average daily trading volumes increased to $57 billion. According to Intotheblock data, over 46% of Bitcoin addresses are making money at the current BTC price. While the figure has improved during the week, it is still significantly lower from the levels registered at the beginning of the year (up until the second decade of March).

The number of large transactions and their volume continued to increase, moving in sync with the price, while the volatility hit the highest level since December 2017 and stayed elevated throughout the whole week.

BTC/USD: Technical picture

Bitcoin recovered above SMA200 weekly (currently at $5,545), which is a big technical improvement that allowed the bulls some breathing space and created a positive momentum that lasted until the end of the week. The next pivotal point is located at $6,500. This area stopped the sell-off and served as a basement for BTC/USD in the end of December 2019. Bitcoin's ability to settle above this level will add weight to the bullish scenario and lay the ground for the next assault at $7,000 and, potentially, SMA100 weekly at $7,150. According to Intotheblock data, there is a cluster of over one million BTC addresses that bought the coin between $6,950 and $7,400, which means this area may slow down the recovery.

The next resistance is created by $8,000, followed by SMA100 daily at $8,250. This barrier is also reinforced by 23/6% Fibo retracement fo rthe downside move from July 2019 high to December 2019 low. Notably, the RSI on the weekly chart reversed from the oversold area and now points upwards, promising more gains in the long run.

The intraday charts confirm the bigger picture as SMA100 4-hour reinforces the resistance of $7,000, while SMA200 4-hour guards $8,000.

If the price moves below $6,500, BTC/USD may enter another consolidation phase with the nearest support located at $6,000. This psychological level separates BTC from a deeper sell-off towards the above-sad SMA200 weekly and $5,300 that served as a strong resistance at the beginning of the week, when the price started a recovery from the sell-off to $4,437. A sustainable move below this area will open up the way to $5,000. 

BTC/USD weekly chart

What's behind Bitcoin's rally

Massive liquidity injections and monetary stimulus implemented by global central banks and governments played on Bitcoin's anti-inflation narrative. On one hand, cryptocurrency experts point out that a flood of money printed by central banks creates a dangerous situation that may trigger hyperinflation and destroy trust in fiat money. Thus, such super accommodative policies create an incentive for buying Bitcoin, which is inflation-resistant and cannot be controlled by governments or any other authorities.

On the other hand, those measures helped to soothe the market's anxiety and triggered the recovery in global markets. Improved sentiments helped Bitcoin and other digital assets as the tide lift all boats.

Stablecoins flooding the market is another reason for Bitcoin's rally at the end of the week. Over $120 million worth of tether (USDC) were minted market over the last 48  hours. While the company behind the stablecoin claims that they replenish the inventory to be ready to satisfy the growing demand, the market participants usually associate new USDC coins with the upcoming BTC buying spree. 

The Forecast Poll showed an improvement in price expectations. While experts remain mostly bearish on a weekly and quarterly basis, the price expectations have increased. All price expectations recovered above $6,000, while the 1-month forecast implies the recovery above $7,000. 

 

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