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Bitcoin Technical Analysis: March/April 2019

Apr 2, 2019 BitcoinResearch 0

If you’ve checked your ticker prices today, then you will have seen that Bitcoin and the crypto market at large are having a phenomenal start to the month of April. Bitcoin has crossed the $5,000 mark for the first time since November of last year. But in a market dominated by hype and headlines, is there tangible evidence that supports this price climb? Or is this just another example of the market getting ahead of itself? We dive into all of that below!

Bitcoin Transactional Analysis:

 

BTC Analysis

The average number of transactions on the Bitcoin chain (the curve above) was much more volatile than in February. We saw a sharp decline in transaction volume, and the network even faced a 3-month low of 210,000 transactions on March 10th. Transaction volume on the network had been steadily growing since January, before it underwent three downward trends on March 10th, 17th, and 24th, where each period saw the network dip below 250,000. However, at the end of March, we saw the network balloon to 390,000 which was the highest figure in over a year. Investors should attribute March’s downward periods to a standard correction, rather than an indicator of more bad things to come. As the end of March and beginning of April have seen the Bitcoin network’s transaction volume climb to levels we haven’t seen since before the year-long bear market.

Bitcoin Hashrate Analysis:

 

BTC Chart

The Hashrate (the curve above) maintained a range of volatility in March, that was similar to the volatility we saw in February. However, March’s hashrate saw an increase of approx. 5% from the month prior. Although volatility has still been problematic, this is the product of an agile trading environment more than anything. With a month over month hashrate increase of approx. 5%, the network is still following a stable development trend. Also just as a friendly reminder to everyone, there are still 13 months to the next halving of the Bitcoin mining reward, where it will go from 12.5 BTC/Block to 6.25 BTC/Block.

charts

In terms of technical analysis, the RSI (Relative Strength Index) is a very effective metric for evaluating future growth potential. The RSI is a momentum indicator that measures the previous price fluctuations of an asset, to determine if it is oversold (undervalued) or undersold (overvalued).

The traditional interpretation of this indicator says that anything with an RSI >70 is overvalued and anything with <30 is undervalued. Looking at Bitcoin’s RSI chart, we can see that the asset is hovering between 42 and 45. Although Bitcoin is not in the undervalued territory, it is still well below the overvalued territory and has been gradually coming down from 2018’s high of 95, which is a positive sign of things to come.

charts

In addition, March 12th saw Bitcoins 50-day moving average intersect with the networks 100-day moving average and it has even continued to surpass the 100-day moving average as we move into April. As April has begun with a very bullish trading period for Bitcoin, this trend deserves continued attention.

In summary, the fundamentals surrounding Bitcoin continue to be strong, which effectively supports Bitcoin’s current price. Therefore, there is no need to act prematurely in the face of market volatility. It is recommended that investors continue to be patient and hold onto the Bitcoin in their portfolios.


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Jacques Y

Jacques is a founding partner and CEO of CryptoCanucks.com with a background in marketing and finance. He has a well-rounded foundation of knowledge in Investing, trading, blockchain and researching both Forex and the Cryptocurrency markets.

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