The price of Bitcoin (BTC) failed to overcome the psychological resistance of $ 50,000 over the weekend and fell below the $ 48,000 level on March 6.
Traders are now looking to see if BTC / USD can cross the $ 50,000 level to resume the bullish cycle. On the other hand, a drop below the recent lows below $ 46,000 is likely to open the door to new lower lows, which could pose a threat to the bullish run that has been around for almost a year, at least in the short to medium term.
Nickname merchant Rekt Capital pointed out similar price levels to watch. If BTC fails to maintain current levels above $ 46,000, the trader expects Bitcoin to hit the bottom somewhere between $ 38,000 and $ 45,000, despite Bitcoin having posted higher lows in the past few days.
“The highest BTC lows remain until they stop,” he said. wrote. “Each subsequent reaction from the January HL has been smaller and smaller. It may be the same now. Better safe than sorry, preparing for a potential collapse of this HL.”
#BTC The highest minima retain
Until they don’t
Each subsequent January HL reaction was less and less
It can be the same now
Better safe than sorry, preparing for a potential collapse of this HL
And if that failure occurs – $ BTC go deep in this portrait pic.twitter.com/VUzgXbVkCX
– Rekt Capital (@rektcapital) March 6, 2021
An important factor that is probably causing the current downward pressure on prices is an increase in whale activity. CryptoQuant data shows an increase in large stock exchange transactions on March 6, although mining activity remains relatively low.
As shown in the graph below, previous increases in whales moving funds to the exchange coincided with falls in the price of Bitcoin on March 3-4.
Macroeconomic headwinds for Bitcoin
As reported by Cointelegraph, Bitcoin is also facing negative pressure from macroeconomic headwinds. A sharp rise in U.S. Treasury yields over 10 years and a retraction in technology stocks, in particular, are weighing on cryptocurrency prices as investors shy away from risky assets.
Meanwhile, the dollar currency index, or DXY, broke through technical resistance, reaching the highest levels since November 2020.
Cointelegraph Markets analyst Michael van de Poppe points out that Bitcoin’s bearish trend remains intact after the last attempt to break $ 50,000 failed.
“This means that the trend is still bearish and the general weakness of the markets in the short term,” he explained. “$ 50,000 so far is prohibitive for Bitcoin.”
However, Bitcoin, like gold, may have a truce once the yields of DXY and the Treasury are close to their own levels of technical resistance.
“I believe that yields are reaching the top relatively soon, including DXY,” explained van de Poppe. “Both are in areas of resistance, which means that we should be close to a higher education in these two, but also in a lower education for Bitcoin and gold relatively soon.”
He added:
March is usually a bad month for markets and history repeats itself. In macroeconomic terms, we are still optimistic about the cycle and heating up for the continuation, despite the recent interest in yields. “