The price of Bitcoin (BTC) did not exceed the psychological resistance of USD 50,000 over the weekend and fell below the USD 48,000 level on March 6.
Now traders are watching to see if BTC / USD can break above the USD 50,000 level to resume the bull cycle. Conversely, a drop below the recent lows below $ 46,000 is likely to open the door to new lows that could then pose a threat to the bull run that has been running for nearly a year, at least in the short to medium term.
Pseudonymous dealer Rect Capital pointed to similar price levels to be observed. Unless BTC holds current levels above $ 46,000, the trader expects Bitcoin to bottom somewhere between $ 38,000 and $ 45,000, although Bitcoin has seen higher lows in the past few days.
“Hold BTC higher lows until they stop,” he wrote. “Any subsequent HL response in January has always been less. Might be the same now. It is better to be on the safe side when preparing for a possible collapse of this HL.”
#BTC hold higher lows
Until they don’t
Any subsequent reaction from HL in January was always less
Might be the same now
It is better to be on the safe side than to prepare for a possible failure of this HL
And should that breakdown happen, $ BTC will hit the bottom on this rewind pic.twitter.com/VUzgXbVkCX
– Rekt Capital (@rektcapital) March 6, 2021
A major factor likely causing the current price pressures is an increase in whale activity. Data from CryptoQuant shows an increase in large transactions on exchanges on March 6, although miners’ activity remains relatively low.
As shown in the graph below, previous upward moves in whales moving funds to be exchanged coincided with a decline in Bitcoin price on March 3rd and 4th.
Macroeconomic headwinds for Bitcoin
As Cointelegraph reported, Bitcoin is also facing pressures from macroeconomic headwinds. In particular, a sharp surge in 10-year US Treasury bond yields and a decline in tech stocks weigh on cryptocurrency prices as investors flee risky assets.
Meanwhile, the dollar currency index (DXY) has broken technical resistance and reached its highest level since November 2020.
Cointelegraph Markets analyst Michael van de Poppe points out that Bitcoin’s downtrend remains intact after its last attempt to break $ 50,000 failed.
“This means that the trend is still bearish and markets are generally weak in the short term,” he said. “So far, $ 50,000 has been a no-go for Bitcoin.”
However, both Bitcoin and Gold could take some pause once the DXY and Treasury yields approach their own technical resistance levels.
“I believe the returns including the DXY will be exceeded relatively soon,” explained van de Poppe. “Both are in resistance areas, which means we should be close to an upper formation on these two, but also relatively soon to a lower formation for Bitcoin and Gold.”
March is often a bad month for markets and history repeats itself. On the macros, despite recent interest in returns, we are still bullish on the cycle and heat up for the continuation. “