On March 10th, there was no rest for weary crypto traders as the 7.9% CPI reading became the day’s headline, putting pressure on global financial markets and erasing the previous day’s gains in Bitcoin (BTC) as the price fell below $40,000 again.
This is shown by data from Cointelegraph Markets Pro and TradingView BTC selling started Thursday in the early hours of trading and intensified into midday, with the price hitting a low of $38,562 before dip buyers broke back above the $39,000 support.
Here’s what analysts have to say about the ongoing price action for BTC and what levels to watch for a breakout to the upside or a pullback to the downside.
“Price Compression Precedes Volatility”
A cryptocurrency trader and pseudonymous Twitter user offered insights into Bitcoin’s recent volatility ‘Rekt Capital’, who released The chart below notes that “BTC is still consolidating between the higher green support and blue resistance of the 50-week EMA.”
accordingly Rekt Capital: “Higher lows and lower highs compress the price. Price compression precedes volatility.”
What it takes to bring back the bullish narrative, Rekt Capital pointed out the green and blue exponential moving average (EMA) lines, which have proved to be strong resistance points over the past two weeks.
Rekt Capital said:
“To move higher within its macro range, BTC needs to recapture the two main bull market EMAs to confirm the bullish momentum.”
BTC holders risk selling at a loss
The oscillating nature of BTC’s price action over the past few weeks has been disputed by research fund Stack Funds, which noted in its latest weekly report that “Bitcoin has plummeted for the past few weeks, trading within the $35,000-$45,000 range with no strong directional momentum intact . “
According to Stack Funds, this recent price action “was mainly news driven” and analysts see no short-term easing as conflict in Ukraine and continued rising inflation continue to pose significant headwinds.
The proof of that Traders who have little appetite for more exposure to current market conditions can be identified using the Bitcoin Exit Earnings Ratio (SOPR).a metric showing the total gains and losses realized on a given day.
Stack Funds noted that the long-term BTC holder’s SOPR is “trending toward its 1.0 threshold,” an important level as it marks the line between selling at a profit or selling at a loss.
According to the report, the long-term SOPR headline trend has been down since bitcoin price peaked in November 2021 and is currently trading “around the 1.5 mark.”
During the two instances shown in the chart above when the SOPR trended and traded below the 1.0 threshold in mid-2018 and late 2019, “Bitcoin traded sideways, falling lower on both occasions.”
Stack Funds said:
“Unless we see a positive catalyst in the markets or a reversal in the SOPR indicator, we expect sideways trading, at least in the short-term, and possibly a potential pullback in price action.”
But it’s not all doom and gloom when it comes to bitcoin price from an on-chain analysis perspective. In the graphic below released According to crypto analyst and pseudonymous Twitter user Plan C, the analyst states that “the number of bitcoin accumulation addresses has become parabolic over the last month.”
Plan C defined accumulation addresses as “addresses that have at least 2 incoming remittances with no dust and have NEVER spent BTC funds.”
Below $46,000 they are not bullish
As for the near-term outlook for bitcoin, Market analyst and Cointelegraph contributor Michaël van de Poppe pointed out that things are not looking bullish below $46,000 and believes that “the odds of hitting those lows are pretty high.”
This near-term bearish sentiment was recently corroborated by David Lifchitz, Managing Partner and Chief Investment Officer at ExoAlpha, who noted that BTC’s recent surge “came out of nowhere and lasted less than an hour without much follow-up.”
“BTC is stuck in the $33,000-$45,000 range. With no breakout in the next 48 hours and a possible break above $45,000 towards $50,000, BTC is likely to continue to bounce off the range bounce off.”
The global cryptocurrency market cap is now $1.744 trillion and the Bitcoin dominance rate is 42.6%.
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