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Bitcoin Monthly Forecast – March 2019

By:
Colin First
Updated: Mar 4, 2019, 05:54 UTC

Following a month of highly positive price activity with major cryptos settling above critical price levels, news-driven momentum is expected to continue influencing price action and a look at current activity suggests the first week of March is likely to see positive performance of bitcoin.

Bitcoin Monthly Forecast – March 2019

The month of February was highly positive for the cryptocurrency market on the whole. While the price action still remains well near multi-month lows, the market saw improvement in investor sentiment and trading volume hit multi-month high cause Bitcoin and other major legacy cryptocurrencies to stage solid positive price action and move well above multiple critical support price levels. The price action in February was highly dominated by headlines driven momentum. Bitcoin, unlike fiat currencies, isn’t backed by a single economy or country owing to the decentralized nature of the asset. The price action in the market which deals with decentralized assets is influenced by demand for the asset in the market and news/events/activities surrounding the asset involved in the transaction. Bitcoin has been finding increasing demand and increasing acceptance as a valid mode of currency in both government organizations across the globe and major private institutions that deal with financial transactions and investments. While regulatory authorities have yet to approve many trading assets created based on Bitcoin such as ETF’s and Futures contracts, headlines suggest that progress is currently proceeding in a favorable direction even if not as fast as expected by most traders and investors which is a positive sign for the future of cryptocurrency market.

Positive Headlines Underpinned Crypto Market Bulls

The price action was positive for bitcoin in the spot market for the majority of the month and while the BTCUSD pair closed on a positive note for the month, increased cautious sentiment and profit booking activities lead to a decline from monthly highs during last trading session of the week. Bitcoin gained in broad market since the start of February as the first week was highly eventful with headlines having greater control over price action. While VanEck/CBOE group had withdrawn their ETF request from the SEC over the partial shutdown of the US government in late January, they resubmitted another request with modified details to make sure their proposal meets standards expected by US SEC. Increased activity surrounding Bitcoin from Venezuela with weekly volume crossing 2000 BTC’s in just Venezuela and U.S. SEC Commissioner Robert commenting that approval of Bitcoin ETF is inevitable, US SEC’s solicitation notice and IOTA’s partnership with U.N. for access to IOTA’s blockchain tech for improving efficiency of UNOPS operations were some of the key events and news that helped Bitcoin find a bullish boost in broad market. However, news that another security vulnerability was found in relation to Ethereum shortly after delaying Ethereum’s network upgrade over key security vulnerability limited further gains.

The second week saw continued positive price action as cryptocurrency market saw fresh fund flow worth more than $2 billion USD enter the market on hawkish comments from SEC commissioner Robert which was viewed by many as hopes for approval of CBOE’s Bitcoin ETF request. News from Ethereum core development team that security issues had been resolved and time frame for Ethereum network upgrade had been preponed and NASDAQ was considering adding Bitcoin & Ethereum liquidity indices to its global data services platform also added to positive investor sentiment. Despite, the updates being purely speculative in nature, these headlines improved investor sentiment and acted as a fundamental support for crypto bulls give the fact that decentralized assets don’t have an exact well-defined event that could provide constant and stable fundamental support. Increased risk appetite surrounding the crypto market as investors waited to book maximum profits in ongoing positive price rally also helped bulls sustain positive price action above critical price levels leading to consolidation of price momentum above critical support levels.

The third week opened on a positive note as hawkish investor sentiment and increased risk appetite carried forward from early February and helped the pair move above $400 mark, however, the rally was short-lived as CTFC and US SEC members who came together to attend an event commented that despite repeated attempts no ETF or future request has been approved yet as the proposals display vulnerabilities that you can be used to manipulate price action. This caused investors to believe that the neither Bitcoin ETF nor futures are likely to be approved anytime soon causing the pair to suffer sharp declines. But price managed to consolidate near critical support level despite the dovish comments from SEC and CFTC members as positive investor sentiment remained strong on news that Japanese central bank considering releasing its own crypto coins. The last week saw a slight decline in price action but managed to consolidate well above $3800 as profit booking activity resulted in a significant portion of fiat being removed from the market as investors turned cautious ahead of Constantinople hard fork. As the decline was limited compared to the last month when the hard fork was postponed. Investors decided to take a chance and see where the rally moves forward to gain an idea on directional bias in the market. This gamble proved to be in favor of investors as price managed to maintain consolidative action even post successfuConstantinoplele hard fork which suggests that aside from $3100 or $3500, the BTCUSD pair has now found new support at $3700 market which could now limit any downside movements and act as new psychological support levels.

Headlines Driven Momentum To Continue Controlling Price Action of Crypto Assets In Immediate Future

News that Bitcoin & Ethereum liquid data was started being published by NASDAQ since last week also provided a great deal of positive influence in crypto market.  The 45-day deadline for the SEC to make a decision to approve or reject CBOE’s request hasn’t arrived yet and the request is unlikely to be completed before the end of this month. This suggests that investors and traders will continue to look for news on Bitcoin ETF by CBOE & Bitcoin Futures by the Bakkt platform which are yet to be approved by SEC as proceedings related to the same will be observed closely for directional cues. Aside from these two key events, unless a sharp profit booking activity comes along, the price action is likely to remain in rangebound/consolidative price action. The BTCUSD pair is expected to open positive for the month of March as investors expect further news coming from Russia over regulatory activities relating to Cryptocurrencies. If the same is successful investors expect the crypto market to see more fund flow from major investors and huge players in finance market  while also waiting for news of where Russia will offer its own crypto coin based on their oil market which is likely to receive a positive response from market resulting in the month of March starting on positive note. A look at the price action in intra-day hourly and weekly charts from technical perspective suggests that bulls are currently building up momentum and further upside move is on the cards as momentum indicators RSI & Stochastic see thier signal line move with inclination towards overbought region but yet to cross above the threshold supporting that further positive price activity is on the cards in the month ahead.

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About the Author

Colin specializes in developing trading strategies and analyze financial instruments both technically and fundamentally. Colin holds a Bachelor of Engineering From Milwaukee University.

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