There was no rest for weary crypto traders on March 10 as a blistering 7.9% CPI print emerged as the headliner of the day, 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 Coin-Crypto Markets Pro and Trading Display shows that the BTC sell-off started in the early trading hours on Thursday and escalated into the afternoon with the price hitting a low of $38,562 before dip buyers bid it back above the support at $39,000.
BTC/USDT 1-day chart. Source: TradingView
Here’s what analysts have to say about the ongoing seesaw price action for BTC and what levels to watch for a bullish breakout or bearish downturn.
“Price Compression Precedes Volatility”
Insight into the recent volatility for Bitcoin was provided by crypto trader and pseudonymous Twitter user ‘Rekt Capital’, who Posted the following chart notes that “BTC is still consolidating between the green higher low support and the blue 50-week EMA resistance.”
BTC/USD 1 Week Chart. Source: Twitter
According to for Rekt Capital, “the higher lows and lower highs are pushing the price. Price compression precedes volatility.”
As for what it will take to reclaim the bullish story, Rekt Capital pointed to the green and blue exponential moving average (EMA) lines that have proved to be strong points of resistance over the past two weeks.
Rekt Capital said:
“To move higher within its macro range, BTC needs to regain the two main 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 on a whim in recent weeks, trading in the $35,000-$45,000 range without strong directional momentum intact.”
According to Stack Funds, this recent price action has been “mainly news driven” and analysts see no near-term relief as the conflict in Ukraine and the ongoing rise in inflation continue to create significant headwinds.
Evidence that traders are reluctant to increase exposure to current market conditions can be found by looking at the Bitcoin Spent Output Profit Ratio (SOPR), a measure that indicates the total gains and losses realized on a given day.
Stack Funds noted that long-term BTC holder SOPR is “tending toward its 1.0 threshold,” an important level as it marks the defining line between selling at a profit or selling at a loss.
Bitcoin long-term holder SOPR. Source: Stacking Funds
According to the report, the long-term holder SOPR has been trending downward since Bitcoin’s price peaked in November 2021,” and is currently trading “around the 1.5 grip.”
During the two instances shown in the chart above, where the SOPR traded below the 1.0-threshold trend in mid-2018 and late 2019, “Bitcoin traded sideways and declined further 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 possible dip in price action, at least in the near term.”
But it’s not all doom and gloom when it comes to Bitcoin price from an on-chain analysis standpoint. In the following chart: Posted by crypto analyst and pseudonymous Twitter user “Plan C,” the analyst explains that “the number of Bitcoin accumulation addresses has become parabolic in the past month.”
The number of unique BTC accumulation addresses. Source: Twitter
Plan C defined accumulation addresses as “addresses that have at least 2 inbound non-material transfers and have NEVER spent money on BTC.”
Related: Bitcoin Fakes a $40K Breakout as US CPI Inflation Data Meets 7.9% Estimates
Not bullish below $46,000
On the near-term outlook for Bitcoin, market analyst and CoinTelegraph contributor Michael van de Poppe noted that things don’t look bullish below $46,000 and he thinks “the chances of taking these lows are pretty good.”
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 spike in BTC “came out of nowhere and lasted less than an hour with not much follow-up.”
“BTC is still stuck in the $33,000-$45,000 range. Without any follow-up in the next 48 hours and a potential breach above $45,000 towards $50,000, BTC is likely to continue bouncing in the range.
The total cryptocurrency market cap now stands at $1.744 trillion and Bitcoin’s dominance is 42.6%.
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