There was no rest for weary crypto traders on March 10, as a soaring 7.9% CPI print emerged as the day’s headline, putting pressure on global financial markets and erasing the previous day’s gains in Bitcoin (BTC), as the price fell back below $40,000.
Data from Cointelegraph Markets Pro and TradingView shows that the BTC sell-off began in early trading hours on Thursday and intensified into midday with the price hitting a low of $38,562 before buyers bid above support again. at $39,000.
BTC/USDT 1-day chart. Source: TradingView
Here is what analysts have to say about the ongoing swinging price action for BTC and the levels to watch for a breakout to the upside or a downturn to the downside.
“Price compression precedes volatility”
Cryptocurrency trader and pseudonymous Twitter user ‘Rekt Capital’ offered insight into the recent volatility of Bitcoin, who aware the chart below notes that “BTC is still consolidating between lower green support and blue 50-week EMA resistance.”
BTC/USD 1-week chart. Source: Twitter
According For Rekt Capital, “higher lows and lower highs are compressing the price. Price compression precedes volatility.”
As for what it would take to bring back the bullish narrative, Rekt Capital pointed to the green and blue exponential moving average (EMA) lines that have proven to be strong points of resistance over the past two weeks.
Rekt Capital said,
“In order to move higher within its macro range, BTC needs to recapture the two key bull market EMAs to confirm bullish momentum.”
BTC holders risk selling at a loss
The oscillating nature of BTC’s price action in recent weeks was disputed by research fund Stack Funds, which noted in its current weekly report that “Bitcoin has moved in recent weeks, trading within the $35,000 – $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 relief anytime soon, as the conflict in Ukraine and persistently rising inflation continue to pose significant headwinds.
Evidence that traders have little appetite for increasing exposure to current market conditions can be found by looking at Bitcoin’s Spent Exit Profit Rate (SOPR), a metric that indicates the aggregate profits and losses realized in a day on particular.
Stack Funds noted that long-term BTC headline SOPR “has trended towards its threshold value of 1.0,” an important level as it draws the line between selling at a profit or selling at a loss.
Long term holder of Bitcoin SOPR. Source: Stack Funds
According to the report, long-term headline SOPR has been trending down since the Bitcoin price peaked in November 2021, and is currently trading “around 1.5.”
During the two cases shown in the chart above, where SOPR trended and traded below the 1.0 threshold in mid-2018 and late 2019, “Bitcoin traded sideways and sank further on both sides.” occasions”.
Stack Funds said,
“Unless we see some positive catalyst in the markets or a reversal in the SOPR indicator, we expect sideways trading and possibly a potential drop in price action, at least in the short term.”
But it’s not all doom and gloom when it comes to Bitcoin price from an on-chain analysis point of view. In the next frame aware Per cryptanalyst and pseudonymous Twitter user ‘Plan C’, the analyst explains that “the number of Bitcoin accumulation addresses has gone parabolic over the last month.”
The number of unique BTC accumulation addresses. Source: Twitter
Plan C defined accumulation addresses as “addresses that have at least 2 incoming transfers with no dust and have NEVER spent BTC funds.”
Related: Bitcoin Fakes $40K Breakout as US CPI Inflation Data Adjusts to 7.9% Estimates
Not bullish below $46,000
As for the short-term outlook for Bitcoin, market analyst and Cointelegraph contributor Michaël van de Poppe indicated that things don’t look bullish below $46,000 and believes “the chances of taking these lows are pretty significant.”
BTC/USDT 1-day chart. Source: Twitter
These short-term bearish sentiments were recently echoed by David Lifchitz, managing partner and chief investment officer at ExoAlpha, who noted that the recent surge in BTC “came out of nowhere and lasted less than an hour without much follow-up.”
“BTC remains stuck in the $33,000-$45,000 range. With no follow-through in the next 48 hours and a possible break above $45,000 towards $50,000, BTC will likely continue to bounce around in the range.”
The total cryptocurrency market capitalization is now $1.744 trillion and the dominance rate of Bitcoin is 42.6%.
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This post $40K Bitcoin Price Within Reach, But Analysts Warn A Sweep From Recent Lows Is Likely
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