Key Points
- The Bitcoin Rainbow Chart suggests the recent dip presents a buying opportunity despite prevailing market fear.
- Liquidation heatmaps predict a potential price bounce to $86.3k in the near future.
The Bitcoin Rainbow Chart, a long-term valuation tool, indicated that the recent dip in Bitcoin price presents an opportunity for investors to buy. This comes despite the market’s prevailing fear.
Heatmaps forecasting liquidation levels suggested that Bitcoin’s price might bounce back to $86.3k in the coming days.
Bitcoin’s Price Bounce and Resistance
On March 10, Bitcoin experienced a 6.89% price bounce, closing at $78.6k. However, the cryptocurrency faced significant resistance at the $84k region.
Analysis of the price chart and liquidation levels indicated that short-term consolidation could be on the horizon.
The Bitcoin Fear and Greed Index, a tool that measures investor sentiment, stood at 34, indicating a state of fear. Over the past week, the index has fluctuated between 30 and 40, even dipping to 24, a level indicative of extreme fear, on March 11.
Bitcoin spot ETFs experienced outflows of $900 million in the past five weeks, further highlighting the bearish market sentiment.
Market Sentiment and Future Predictions
The Bitcoin Rainbow Chart suggested that despite the current fear in the wider market, Bitcoin is still considered “cheap.” This claim seems bold, especially considering the declining stock markets worldwide. However, the potential risk to reward ratio might still be appealing to investors.
A look at the 6-hour chart revealed a short-term bearish structure. The $85k level has acted as resistance over the past week. Yet, the A/D indicator showed an uptrend in March, with the price trending towards $80k.
The Awesome Oscillator indicated that momentum was slightly bullish, although not enough to drive trends. The 1-month liquidation heatmap outlined the $100k and $71.7k-$72.3k as significant liquidity clusters. The $86.3k and $76.3k levels could also attract prices.
Despite Bitcoin’s bearish structure, a bounce is possible according to the A/D indicator. A bounce beyond the local resistance at $85k could turn market participants bullish, before a bearish reversal is initiated at the $86.3k magnetic zone.
As a result, traders are advised to maintain a bearish outlook until the local resistance regions are breached.
