Bitcoin has failed again to break above $52,000. This rejection suggests that more downside movement is likely in the near term. The flagship crypto has stopped its bull run in the past several weeks as the price corrected from an all-time high of $58,000 to bottom around $43,000.
Several arguments were discovered to explain the pullback, including a significant sell-off from the miners and whales. The other key reason for the correction is the abrupt surge of yields throughout the world.
Downtrend Is Intact Since Peaking $58,000
The two-hour chart for Bitcoin indicates a clear downtrend since the peak was reached in February just above $58,000. Since that time, bearish support/resistance flips have happened often suggesting that there might be an imminent weakness in the short term.
Notably, the bearish support/resistance flip has occurred at the $55,000 and $52,000 levels. $52K serves as the current major level of resistance. Recently, BTC’s price attempted to break through the resistance zone but it failed to do that. After the failed breakout, retesting the levels below appears inevitable.
In that context, the crucial support zone to hold up bitcoin is the level between $48,300 and $48,800. Provided that these levels hold, a renewed momentum to test the $52,000 area may happen.
Any failure to hold the support zone and the range low might encounter a renewed test. Thus, the correction does not appear over for BTC’s price. Moreover, March is not the best time for bitcoin historically which means that the current price drop is not surprising.
March Is A Red Month For Crypto Historically
On the weekly chart, Bitcoin shows a clear uptrend. Hence, near-term corrections should not get classified as bearish trend reversals for now. Each bull cycle has its periods of consolidation and corrections to generate more strength for the market’s next impulse wave. Thus, corrections of 30%-40% often happen in bitcoin bull cycles and that should be considered for the latest pullback too.
Historically, March is quite terrible for crypto markets with recent years showing general weakness in this period. The corrections normally end at the 21-Week MA since it is the critical indicator to review for the bull and bear market’s momentum.
Provided that BTC’s price remains above the 21-Week MA, a more bullish continuation is highly likely. The 21-week MA is currently located at $29,000. However, in a few weeks, it is likely to climb to between $33,000 and $35,000. Therefore, provided that BTC remains above the $30,000 area and the 21-Week MA, investors should not worry about the crypto market bullish trend.
Yields Are Running Up As Global Markets Weaken
The key reason for the weakness in BTC and gold is shown in various market charts. The 10-year yield across the world has reached the highest point in one year. That is pushing investors out of the assets like bitcoin and gold as they prefer the riskier assets. In that context, the yields have been doing well with the dollar showing some signs of recovery.
Nevertheless, the moment of attention has now shifted to a particular topic, it normally marks the end of such type of a trend. In that case, the yields are at a critical level here as they might, technically, experience a bearish support/resistance flip, after which they can plunge to retest the 1% level.
That may happen following any news from the Federal Reserve in the coming months. However, a dropdown in yields might be bullish for gold and bitcoin in the future.
Critical Levels To Watch For BTC Price
Bitcoin is still volatile, the critical levels to watch out for are defined in the charts, and provided bitcoin sustains strong support at $48,300-$48,700, a retest of the $52,000 zone is possible. That is the crucial breaker for more bullish momentum. If $52,000 breaks, the bulls will then target $55,000 and later might go for a new all-time high.
Nevertheless, if the $52K holds strong as resistance, a breakdown below the $48,500 support cannot be ruled out. In such a market swing downside, the bulls hope that the $42,000-$44,000 area will hold as support next, which is quite important.
Eventually, the 21-week MA is the critical indicator to watch for bull/bear momentum on the higher time charts. But, provided that indicator sustains support, the bull market remains intact.