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Bitcoin threatens $38K as 3-day chart hints at March 2020 Covid crash repeat

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Overnight, Bitcoin (BTC) reached $38,000, as traders entered the weekend with apprehension.

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

The 3-day chart may serve as a “forerunner” to the weekly chart

Following repeated tries to break the $38,000 support, BTC/USD was seen around $39,000.

Due to geopolitical happenings, the pair also had a brief spike above $40,000 on Friday, although it only lasted a few minutes before returning to the previous status quo.

Such “fakeouts” to higher levels — which culminated in Bitcoin going full circle and liquidating both short and long bets — were already commonplace for market players earlier this month.

Lower timeframes, on the other hand, were starting to show signals of a more substantial downturn.

“For the first time since the Covid fall, 3 Day BTC candles are flirting with the 200 MA,” Material Indicators informed Twitter followers on the day.

“If this is a foreshadowing of what the Weekly candle will do, make sure you have enough power to take advantage of the following buying chance. That bounce has the potential to change your life.”

The 200-week moving average, which is now slightly above $20,000 and increasing, has served as a historical bottom zone for Bitcoin throughout its history and has never been breached.

BTC/USD 1-week candle chart (Bitstamp) with 200MA. Source: TradingView

It would take a 50% loss from the current spot price and a 70% decline from all-time highs to meet it, but BTC/USD has done so before.

For example, the Covid crash witnessed a 60% drop in just a few days before an equally powerful turnaround later in the year ushered in a new price paradigm.

During the week, Bitcoin remained at the mercy of stock markets. Which trended lower to cap weekly losses for the S&P 500 and the Nasdaq, respectively, of 2.9% and 3.5%.

BTC price dips below $40K as Wall Street open spells pain for Bitcoin bulls

BTC bets of all sizes continue to pour in

On the plus side, long-term investors can rejoice over whale buy-ins and smaller investor wallet growth.

As previously reported, 30,000 bitcoins (BTC) left Coinbase on Friday. While exchange reserves fell to levels similar to those recorded in July and September of last year, just before Bitcoin’s substantial price rises.

“10-100 BTC wallets are stacking like crazy, and their supply is growing parabolic,” explained Lex Moskovski, CEO of Moskovski Capital. Citing data from on-chain analytics firm Glassnode.

“The meat of the $10k-50k Bitcoin move was accurately sold by these guys.”

The percentage of BTC held by entities – one or more wallets with the same owner — has reached its highest level in a year, according to an accompanying chart.

Bitcoin supply proportion held by entities with a balance of 10-100 BTC annotated chart. Source: Lex Moskovski/ Twitter
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