The price of Bitcoin (BTC) could not break above the psychological resistance of $ 50,000 over the weekend and fell below the $ 48,000 level on March 6th.
Now traders are looking at whether BTC / USD could break above the $ 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, which could then pose a threat to the bullrun that has existed for almost a year, at least in the short to medium term.
Pseudonymous trader Rekt Capital pointed out similar price levels to look at. If BTC does not keep current levels above $ 46,000, the trader expects Bitcoin to fall somewhere between $ 38,000 and $ 45,000 in the area, despite Bitcoin posting higher lows in recent days.
“BTC keeps higher lows until that happens,” he said wrote. “Every subsequent reaction of the HL in January was less and less. Can be the same now. It is better to be safe than to be sorry by preparing for a possible breakdown of this HL.”
#BTC Higher lows hold
Until they do not
Every subsequent reaction of the January HL was less and less
Can now be the same
It is better to be safe than to be sorry by preparing for a possible breakdown of this HL
And would this explanation occur – $ BTC will fall at the bottom of this iteration pic.twitter.com/VUzgXbVkCX
– Rekt Capital (@rektcapital) 6 March 2021
One important factor that is likely to cause the current downward pressure on the price is an increase in the activities of whales. Data from CryptoQuant show an increase in large transactions after exchanges on March 6, although the miners’ activity remains relatively low.
As shown in the chart below, previous marches fall into whales shifting funds to exchange along with declines in the Bitcoin price on March 3-4.
Macroeconomic headwind for Bitcoin
As Cointelegraph reported, Bitcoin is also facing downward pressure from macroeconomic headwinds. A sharp rise in U.S. Treasury yields in ten years and especially a decline in technology stocks weighs the prices of cryptocurrency as investors flee risk assets.
Meanwhile, the Dollar Currency Index, or DXY, broke technical resistance and reached its highest levels since November 2020.
Cointelegraph Markets analyst Michael van de Poppe points out that the declining trend of Bitcoin remains intact after the last attempt to break $ 50,000 failed.
“This means that the trend is still declining in the short term and the overall weakness is in the markets,” he explained. “$ 50,000 is a no-go for Bitcoin so far.”
However, Bitcoin, as well as gold, may gain some respite once the returns of DXY and the Treasury approach their own technical resistance levels.
“I believe that the returns will be higher than the DXY relatively soon,” Van de Poppe explained. “Both are in resistance areas, which means we should be close to a top formation relatively soon, but also relatively soon to be at a bottom formation for Bitcoin and gold.”
He added:
March is often a bad month for markets and history repeats itself. Macro-wise, we are still strong across the cycle and heated for continuation, despite recent interest in returns. ‘