Decoding Bitcoin, Ethereum, And Dogecoin Pullbacks: A Technical Analysis

Mar 15, 2024

Bitcoin (CRYPTO: BTC) accelerated its decent during Friday’s 24-hour trading session, falling over 8% lower at one point before bulls came in and bought the dip at the 21-day exponential moving average (EMA), causing the crypto to bounce up slightly from the low-of-day.

Cryptocurrencies have seen record weekly inflows of $3.4 billion and although Bitcoin pulled back on Thursday and Friday, the crypto has skyrocketed about 60% since the market closed on Dec. 31, 2023.

To explain the strong bull cycle the crypto market has been experiencing, Bank of America’s chief investment strategist, Michael Hartnett, quoted Marxist theorist and social activist Antonio Gramsci: “The old world is dying, and the new world struggles to be born; now is the time of monsters.”

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Additionally, Hartnett suggests that prevailing economic conditions, where the Consumer Price Index (CPI) inflation is forecast to jump to 3.6% for the headline CPI and 4% for the core CPI on a year-over-year basis by June, are conducive to investing in gold, commodities, cryptocurrency, cash.

While Bitcoin’s, Ethereum’s (CRYPTO: ETH) and Dogecoin’s (CRYPTO: DOGE) retracement on Friday may have spooked investors, especially those who watch the cryptos on smaller time frames, the pullback is needed. For the short-term, traders only need to look back to March 5, when Bitcoin plunged 13% to the $59,224 level before eventually reaching a new all-time high of $73,835 on Wednesday.

Traders who believe history will repeat, and Bitcoin will continue to trade higher within its bull cycle after the retracement, may choose to play the move by taking a position in the Grayscale Bitcoin Trust ETF (NYSE:GBTC).

GBTC is a popular spot Bitcoin ETF because it is highly liquid, offering traders and investors a high level of flexibility to manage their trades, with an average 30-day trading volume of over 14,000 shares.

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The Bitcoin and Ethereum Charts: Bitcoin and Ethereum negated their uptrends on Friday, by forming a lower low under the higher low, which each crypto formed on March 11. Both crypto’s bounced up from the low-of-day on Friday, however, which had Bitcoin and Ethereum looking to print hammer candlesticks on the daily chart, indicating the local bottom may have occurred.

Bitcoin and Ethereum are holding above support at the 21-day EMA, although the cryptos lost support at the 8-day EMA on Friday. The retracement caused Bitcoin and Ethereum’s relative strength indexes (RSIs) to drop back into neutral territory from being overbought, which is a positive development for bullish traders.

Bulls want to see Bitcoin and Ethereum trade sideways for a period of time on decreasing volume, which would indicate the bears failed to gain control and a period of consolidation is underway. Bears want to see Bitcoin and Ethereum close Friday’s session near the low-of-day and for the cryptos to fall under the 21-day EMA over the weekend, which could accelerate downside pressure.

Bitcoin has resistance above at $69,000 and at the new all-time high and support below at $66,999 and at $64,899.

screenshot_379.pngEthereum has resistance above at $3,973 and at the previous all-time high of $4,867 and support below at $3,670 and at $3,284.

screenshot_380.pngThe Dogecoin Chart: Although Dogecoin has been highly volatile on the daily chart, the Shiba Inu-based crypto has closed each trading session since March 3 and Friday between $0.153 and $0.182. Since that date, Dogecoin has been trading in a horizontal pattern.

Like Bitcoin and Ethereum, Dogecoin lost support at the 8-day EMA on Friday but held above the 21-day EMA. Also like Bitcoin and Ethereum, Dogecoin was working to print a hammer candlestick on the daily chart.

Bulls want to see Dogecoin eventually surge up toward the 20-cent level, which would break the crypto up from the sideways pattern and cause a higher high to print. Bears want to see Dogecoin drop under the 21-day EMA, which would confirm a new downtrend.

Dogecoin has resistance above at $0.176 and at $0.196 and support below at 16 cents and at the $0.146 mark.screenshot_381.png

Featured image sourced from Shutterstock

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