Bitcoin (BTC) has halted its bull run in the past few weeks as the price was corrected from an all-time high of $ 58,000 to around $ 43,000.
Several arguments have been made for the withdrawal, including a sell-off of miners and whales. The other main reason for the correction is the sudden surge in returns around the world.
The downtrend has persisted for $ 58,000
BTC / USD 2-hour chart. Source: TradingView
The 2-hour chart for Bitcoin shows a significant downward trend since the high in February at USD 58,000. Since then, bearish support / resistance flips have emerged, indicating further weakness in the short term.
This bearish support / resistance flip has occurred at the $ 55,000 and $ 52,000 levels, with the latter serving as the main area of resistance right now.
In the past few days, Bitcoin’s price has tried to break through this resistance zone but has not done so. After such a failed breakout, it seems inevitable to retest the values below.
In this perspective, the critical support zone for Bitcoin is between $ 48,300 and $ 48,800. As long as these apply, a retest of the $ 52,000 zone could take place.
If the support zone and range are not kept low (green area), a retest will likely be performed. Hence, the correction for the price of Bitcoin does not seem to have ended. Additionally, the month of March is not the best time for Bitcoin, so the current drop in prices should come as no surprise.
March is historically a bad month for crypto
BTC / USD 1 week chart. Source: TradingView
The weekly chart for Bitcoin shows a clear upward trend. Short-term corrections should therefore not yet be classified as a bearish trend reversal. Each bull cycle has periods of consolidation and correction to create more power for the next wave of impetus in the market.
Hence, corrections of 30% to 40% often occur during Bitcoin bull cycles and this should be kept in mind with this retreat as well.
Historically, March is a terrible month for crypto as the past few years have shown weakness overall over this period. Such corrections often end with the 21 week MA as this is the key indicator to watch for bulls and to carry the momentum of the market.
As long as Bitcoin’s price is above the 21-week MA, another bullish continuation is likely. The 21-week MA is currently $ 29,000, but within a few weeks it is between $ 33,000 and $ 35,000. As long as Bitcoin stays above this $ 30,000 area and the 21-week MA, investors shouldn’t worry about the general uptrend.
Yields are rising, leading to weakness in the markets
10 Year Bond Yield 1 Week Candlestick Chart. Source: trade view
The main reason Bitcoin and Gold are weak is shown in this graph. The 10-year return worldwide has reached its highest point since the beginning of the year. That is pushing investors out of assets like bitcoin and gold.
Against this backdrop, yields have done well, but the dollar has also shown signs of recovery.
However, the moment the attention shifts to a particular topic, it often marks the end of such a trend. In this case, returns here are at a crucial level as they could technically see a bearish support / resistance flip after which they can fall to retest the 1% level.
That could happen in the coming weeks, according to news from the Federal Reserve, but a decline in yields would be bullish for Bitcoin and gold going forward.
Decisive levels for the Bitcoin price
BTC / USDT 4 hour chart. Source: TradingView
The critical levels to be observed are defined in the table above. As long as Bitcoin gets the support at $ 48,300 to $ 48,700, retesting the $ 52,000 area is likely. This is the key factor for further upward momentum. If $ 52,000 breaks, there is a test of the $ 55,000 range and possibly new all-time highs on the table.
If the $ 52,000 area is considered resistance, a collapse below the $ 48,500 support is likely. In that perspective, you want to see $ 42,000-44,000 in support next, which is very important.
Finally, the 21 week MA is the essential indicator to look for bull and bear momentum in the higher time periods. As long as this indicator is supported, the bull market will remain intact.
The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading step is associated with risks. You should do your own research when making a decision.
