Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice
Massive short positions on Bitcoin were opened on Bitfinex in the hours prior to press time. This could be a hint that smart money was building a position in expectation of a large drop in price, and smaller market participants could assess following their bias.
Can there be a near-term short squeeze, or was this only the beginning of short positions being built? For Maker, the near-term technical analysis showed that the $1730 to $1840 area likely would be a tough area to break. A move past $1800 could be encouraging for the bulls.
MKR- 1H
Source: MKR/USDT on TradingView
Using the rally in late February, a set of Fibonacci retracement levels were plotted based on MKR’s move from $1512 to $2080. Moreover, the Fixed Range Volume Profile was also plotted since that rally. The profile tool showed that the Point of Control lay at $1998.
MKR was able to hold on to the $1729 support level and bulls could drive prices toward the next level of resistance at $1796. However, this move would face strong resistance all the way up to $1840. Beyond that, $1900 and $1950 could also reject the bulls’ advance.
Rationale
Source: MKR/USDT on TradingView
The RSI bounced from the oversold territory on the hourly but was still in bearish territory. The Awesome Oscillator was also beneath the zero line. Both the momentum indicators showed bearish momentum was still in sway.
The CVD showed that the past couple of days had been dominated by selling pressure.
Conclusion
The 61.8% retracement level has been defended in recent hours. The indicators did not yet show that the momentum had flipped to bias, nor the arrival of demand. The volume profile tool highlighted that resistance was strong in the near term all the way to $1840 and $2000. Flipping $1796 from resistance to support would also see Maker make its way into the Value Area Lows, according to the profile tool. If the bulls can flip this area into support, a further upside toward $2000 would become more of a likelihood.
