Weary cryptocurrency traders were not relieved on March 10, as today’s headline showed CPI rose 7.9%, which pressured global financial markets and wiped out last day’s gains in Bitcoin (BTC) as the price fell below $40K.
Data from Cointelegraph Markets Pro and TradingView shows that bitcoin selling started in the early hours of trading on Thursday and rose by lunchtime with the price reaching a low of $38.562 before buyers bid again, breaking the support at $39,000.
BTC/USDT 1-day chart. Source: Trading View
Here’s what the analysts have to say about the ongoing BTC price volatility and the levels to watch in the event of a bullish breakout or bearish breakout.
Price pressure is more important than volatility
A look at the recent volatility of Bitcoin was provided by crypto trader and Twitter pseudonym “Rekt Capital” who posted the following chart noting that “BTC is still consolidating between the green lower upper support and the blue resistance of the 50-week EMA.”
BTC/USD weekly chart. Source: Twitter
According to Rekt Capital, higher lows and lowers lead to price pressure. Price pressure takes precedence over volatility. ”
In terms of what it takes to restore the bullish combo, Rekt Capital pointed to the green and blue EMA lines, which have proven to be strong resistance points over the past two weeks.
Rekt Capital SA,
“In order to move higher in the macro area, BTC needs to recover the two major moving averages of the beef market to confirm the bullish momentum.”
BTC holders to sell risk a loss
The volatile nature of BTC’s price movement in recent weeks is discussed by Stack Funds, which notes in its current weekly report that “Bitcoin has risen in recent weeks, trading in the $35,000 to $45,000 range without maintaining strong directional momentum.”
According to Stack Funds, recent price action has been “mainly driven by news” and analysts see no short-term relief as the conflict in Ukraine and persistently high inflation remain major headwinds.
Evidence that traders tend not to increase their exposure to current market conditions can be found by looking at the Bitcoin Profit Spent Ratio (SOPR), a calculation that shows the total gains and losses made on a given day.
Stack Funds notes that a long-term BTC SOPR holder is “aiming for a threshold of 1.0,” which is an important level as it marks the line between selling at a profit or selling at a loss.
Bitcoin holds SOPR for the long term. Source: Stack Funds
According to the report, the long-term SOPR holder has fallen since Bitcoin peaked in November 2021 and is “currently trading” around the 1.5 handle. ”
On the two occasions shown in the chart above, when the SOPR veered and traded below the 1.0 threshold in mid-2018 and late 2019, “Bitcoin traded sideways and fell the most both times.”
Stack Funds said:
“Unless we see a positive stimulus in the markets or a reversal in the SOPR index, we anticipate sideways trading and possibly a possible price decline, at least in the short term.”
But they are not all bad when it comes to the price of Bitcoin in terms of chain analysis. In the following chart, posted by a crypto analyst and Twitter user under the pseudonym “Plan C,” the analyst states that “the number of bitcoin hoarding addresses has gone equivalently over the past month.”
The number of unique BTC pool addresses. Source: Twitter
Plan C defines storage addresses as “addresses that contain at least two dust-free incoming transfers that have never used BTC.”
Related: Bitcoin Fakes $40K Breakout as US CPI Inflation Data Fits in with 7.9% Estimates
Not bullish below $46000
As for the near-term outlook for bitcoin, market analyst and Cointelegraph contributor Mikael van de Poppe notes that things do not look optimistic at below $46,000, and believes that “the chances of these declines are very high.”
BTC/USDT 1-day chart. Source: Twitter
Such near-term bearish sentiment was recently confirmed by David Lifshitz, CEO and CCO at ExoAlpha, who noted that the recent BTC rally “came out of nowhere and lasted less than an hour without much repercussions.”
“BTC remains in the $33,000-$45,000 range. Without any follow-up over the next 48 hours and a potential break above $45,000 versus $50,000, BTC is likely to continue swinging in that range.”