There was no rest for weary crypto traders on March 10 with a blistering 7.9% CPI print has emerged as the headline of the day, putting pressure on global financial markets and wiping out yesterday’s gains in Bitcoin (BTC) as the price fell back below $40,000.
Data from Cointelegraph Markets Pro and TradingView shows that BTC selling began in the early hours of trading on Thursday and intensified by midday, with the price hitting a low of $38,562 before bearish buyers pushed it back above support at $39,000.
Here’s what analysts have to say about the seesaw price action for BTC and what levels to watch for a bullish breakout or bearish slowdown.
“Price compression precedes volatility”
An overview of Bitcoin’s recent volatility was offered by crypto trader and pseudonymous Twitter user Rekt Capital, who job the following chart noting that “BTC is still consolidating between lower green support and blue resistance in the 50-week EMA.”
According to for Rekt Capital, “highs and lows compress prices. Price compression precedes volatility.
As for what it would take to recoup the bullish narrative, Rekt Capital pointed to the green and blue exponential moving average (EMA) lines that have proven to be strong resistance points over the past couple of weeks.
Rekt Capital said:
“To climb higher in its macro range, BTC needs to recover the two major bull market EMAs to confirm bullish momentum.”
BTC holders risk selling at a loss
The oscillating nature of BTC’s price action over the past few weeks has been discussed by research fund Stack Funds which noted in its current weekly report that “Bitcoin has been treading water for the past few weeks, trading within the $35,000 to $45,000 with no strong directional momentum intact.”
According to Stack Funds, this recent price action “has been mostly news driven” and analysts see no near-term relief as the conflict in Ukraine and persistently rising inflation continue to pose headwinds. important.
Evidence that traders have a low appetite for increased exposure to current market conditions can be found by looking at the Bitcoin Spent Output Profit Ratio (SOPR), a metric that indicates the cumulative gains and losses made on a particular day.
Stack Funds noted that SOPR, the long-term holder of BTC, “trends towards its threshold value of 1.0,” an important level as it marks the line between selling for profit or selling for loss.
According to the report, long-term holder SOPR has been trending lower since Bitcoin price peaked in November 2021, and currently it is trading “around the 1.5 handle.”
During the two instances shown on the chart above where SOPR moved and traded below the 1.0 threshold in mid-2018 and late 2019, “Bitcoin traded sideways and went down again both times.”
Stack Funds said:
“Unless we see a positive catalyst in the markets or a reversal in the SOPR indicator, we expect sideways trading and possibly a potential price decline, at least in the near term.”
But all is not bleak when it comes to Bitcoin price from an on-chain analysis perspective. In the following table job by crypto analyst and pseudonymous Twitter user “Plan C”, the analyst explains that “the number of Bitcoin accumulation addresses has gone parabolic over the past month.”
Plan C defined accumulation addresses as “addresses that have at least 2 dust-free inbound transfers and have NEVER spent BTC funds.”
Related: Bitcoin usurps a breakout of $40,000 as US CPI inflation data comes in line with estimates of 7.9%
Not bullish below $46,000
As for the short-term outlook for Bitcoin, Michaël van de Poppe, market analyst and Cointelegraph contributor Noted that things don’t look bullish below $46,000 and he thinks the “chances of taking those dips are pretty big”.
These short-term bearish sentiments were recently echoed by David Lifchitz, Managing Partner and Chief Investment Officer at ExoAlpha, who noted that BTC’s recent spike “came out of nowhere and lasted less than an hour without much follow-through. “.
“BTC still remains stuck in the $33,000-$45,000 range. With no follow-up in the next 48 hours and a possible break above $45,000 towards $50,000, BTC will likely continue to bounce back within the range.
The overall cryptocurrency market capitalization now stands at $1.744 billion and Bitcoin’s dominance rate is 42.6%.
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