On March 10, crypto traders were not resting as a 7.9% CPI print was the headline. This put pressure on global financial markets, and erased the gains made in Bitcoin (BTC), as the price dropped below $40,000.
Cointelegraph Markets Pro and TradingView data show that the BTC selloff began on Thursday and escalated into the midday, with the price reaching a low point of $38,562 just before dip buyers bought it back up to $39,000.
BTC/USDT 1-day chart. Source: TradingView
Here are the opinions of analysts on the current price volatility for Bitcoin and the levels that should be monitored for a bullish breakout, or a bearish downturn.
“Price compression precedes volatility”
Crypto trader and pseudonymous Twitter User ‘Rekt capital’ provided insight into Bitcoin’s recent volatility. He posted the following chart, noting that Bitcoin “continues to consolidate between the green higher low support level and the blue 50-week EMA Resistance resistance.”
BTC/USD 1-week chart. Source: Twitter
Rekt Capital says that price compression is caused by higher lows and lower highs. Price compression precedes volatility.”
Rekt Capital outlined what it would take for bullish sentiment to be reclaimed. They pointed to the blue and green exponential moving averages (EMA) lines, which have been strong points of resistance in the past two weeks.
Rekt Captial said,
BTC must reclaim two important bull market EMAs in order to move higher within its macro range. This will confirm bullish momentum.
BTC owners run the risk of losing their investment
Stack Funds, a research fund, discussed the oscillating nature BTC’s price action over the last few weeks. It noted in its weekly report that “Bitcoin whipsawed in the past weeks, trading in the $35,000 – $45,000 range without any strong directional momentum intact.”
Stack Funds says that the recent price movement “has been mainly media-driven”. Analysts don’t expect any relief in the near future as the conflict in Ukraine, and the persistent rise in inflation continue to be significant headwinds.
The Bitcoin Spent Output Profit Ratio is a measure that shows how much traders are willing to increase their exposure to current market conditions.
Stack Funds observed that SOPR, the long-term BTC holder, “is trending towards its threshold level of 1.0,” which is an important level because it defines the line between selling at a profit and selling at a loss.
Bitcoin long-term holder SOPR. Source: Stack Funds
The report states that the SOPR long-term holder has been trending down ever since Bitcoin’s peak in November 2021.” It currently trades at the 1.5 handle.
The chart shows that the SOPR traded below the threshold of 1.0 in mid-2018 and end 2019, respectively. “Bitcoin traded sideways, and dipped further both instances.”
Stack Funds said,
“Unless there is a positive catalyst in markets, or a reversal of the SOPR indicator, we expect sideways trades and possibly a dip in price action in the near term.”
It’s not all bad news when it comes to Bitcoin prices from an on-chain perspective. The following chart was posted by crypto analyst Plan C, a pseudonymous Twitter user. It shows that the number of Bitcoin accumulation addresses has increased dramatically over the past month.
The number of BTC accumulation addresses that are unique. Source: Twitter
Plan C defined accumulation addresses to be “addresses with at least 2 incoming transfers but have never spent BTC funds.”
Related: Bitcoin fakes $40K as US CPI inflation data confirms 7.9% estimates
Below $46,000, be cautious
Michael van de Poppe, market analyst and contributor to Cointelegraph, stated that Bitcoin is not bullish at $46,000. He believes “the chances of taking those lows are very significant.”
BTC/USDT 1-day chart. Source: Twitter
David Lifchitz (managing partner, chief investment officer at ExoAlpha), echoed these short-term bearish sentiments recently. He noted that the recent spikes in Bitcoin “came out from nowhere and lasted for less than an hour without much follow-through.”
“BTC is stuck at $33,000 to $45,000. BTC will likely continue to bounce in this range without any follow-up in the next 48hrs and a possible break of $45,000 towards $50,000.
The total cryptocurrency market is now worth $1.744 trillion, and Bitcoin is the dominant currency at 42.6%.
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