March 27, 2024
Bitcoin's at $68,193, Faces Turbulent Week After Weekend Losses
Bitcoin price today

Bitcoin’s at $68,193, Faces Turbulent Week After Weekend Losses

Monday, March 18, 2024: Bitcoin Price stands at $68,193, facing a tumultuous start to the week, grappling with the aftermath of a highly volatile weekend that inflicted heavy losses on traders. The cryptocurrency, currently trading at $68,306, is striving to regain its previous all-time highs amidst sustained selling pressure.

BTC/USD 1-day chart. Source: TradingView

As the battle against inflation intensifies on the macroeconomic front, both crypto and traditional risk assets are eagerly awaiting signals from the United States Federal Reserve. The critical zone that BTC/USD must reclaim for price discovery to resume remains elusive, prompting speculation about the possibility of a retracement reminiscent of previous halving cycles. With just one month left until the next block subsidy halving, Bitcoin may be following a pattern observed before such events.

Over the weekend, Bitcoin experienced sharp declines, hitting its lowest levels since March 6 before staging a recovery close to $69,000. However, it failed to maintain momentum and encountered fresh losses at the weekly close. Despite this setback, Bitcoin managed to secure its second-highest weekly close ever, finishing just below $68,400.

Analysts are closely monitoring key indicators such as the 21-period exponential moving average (EMA) on the four-hour chart and Bitcoin’s relative strength index (RSI), which currently stands at 48.2. Reclaiming the $69,000 – $70,000 range and maintaining a strong close above the 21EMA and RSI above 50 are seen as crucial confirmations for a potential upward movement.

BTC/USDT perp liquidity heatmap (screenshot). Source: CoinGlass

The weekend’s intense selling pressure was attributed to various factors, including the unwinding of positions by a single hedge fund and additional selling by smaller BTC holders. Despite these challenges, some traders remain optimistic, emphasizing Bitcoin’s resilience and urging against panic selling.

Market data reflects the significant liquidations that occurred during the weekend downturn, with long liquidations totaling more than $300 million. Liquidity on exchanges, particularly on Binance, has been affected, with bid support concentrated around $66,266.

Exchange Bitcoin futures open interest (screenshot). Source: CoinGlass

The weekend’s events also resulted in a reset in both open interest and funding rates, although funding rates remain positive. Some analysts view these resets as necessary for the cryptocurrency’s upward trajectory.

As Bitcoin miners approach the final month of 6.25 BTC block subsidies before the halving in April, discussions abound regarding the potential impact on price behavior. Historical trends suggest that Bitcoin may experience a retracement before rallying post-halving.

Bitcoin halving price action comparison. Source: Rekt Capital

The upcoming Federal Open Market Committee (FOMC) meeting on March 20 adds to the uncertainty surrounding risk assets. While markets expect few surprises, Fed Chair Jerome Powell’s commentary will be closely scrutinized for hints of future policy moves.

Fed target rate probabilities. Source: CME Group

Despite the prevailing sentiment of “extreme greed” according to the Crypto Fear and Greed Index, some long-term holders have been engaging in profit-taking. Over the past month, nearly 600,000 BTC, valued at around $40 billion, have been distributed by long-term holders, indicating a willingness to realize gains amid market volatility.

Bitcoin faces a pivotal week as it navigates through volatile market conditions and awaits cues from both macroeconomic factors and the Federal Reserve. While challenges persist, many in the crypto community remain optimistic about Bitcoin’s long-term prospects, emphasizing the importance of maintaining perspective amidst short-term fluctuations.

Image by frimufilms on Freepik

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