Will BTC ditch the bear market? 5 things to know in Bitcoin this week
Bitcoin (BTC) enters the final week of March in uncertain territory as a strong weekly close still keeps $30,000 out of reach.
The biggest cryptocurrency has sealed seven days of virtually flat performance despite some volatility in between as the market searches for new direction. Where can it go next?
In what was a week of several macroeconomic surprises, BTC/USD spent a lot of time reacting to US Federal Reserve decisions and related comments.
Next up, however, is a period of relative calm, followed by an important monthly close, which analysis says could see the start of a new bullish trend.
Bitcoin is currently up 20% for March, meaning the coming days will determine the strength of the ongoing recovery from multi-year lows.
Cointelegraph takes a look at five key topics to keep in mind during the last week of what has been a volatile month.
Countdown to Bitcoin price monthly close
Bitcoin managed to end the week with a modest rebound, returning to the $28,000 mark, data from Cointelegraph Markets Pro and TradingView show.
This meant that BTC/USD remained virtually untouched from the previous weekend, providing some impressive stability despite the periods of volatility that occurred in the intervening period.
Nevertheless, there are concerns that the market may struggle to maintain current levels.
In a recent analysis on March 27, the popular Twitter account IncomeSharks flagged on balance sheet volume (OBV) as a clear sign of declining momentum.
“Just hard to ignore the weak OBV at resistance, price at resistance, and the lack of demand at those prices,” the commented next to a diagram.
“If we fall, we get another wave of buying demand that should push us higher. The only way we go up from here is big news in the markets or another squeeze.”
Trader and analyst Rekt Capital agreed that a retracement would be “healthy” for Bitcoin if it were to enter.
“If BTC continues to struggle to break beyond $28,700, a healthy drop may be needed to get new buyer interest at lower levels,” tweeted on the day.
“Technology is showing some near-term weakness, and it may be that a catalyst soon appears to play out that weakness.”
Over the weekend, Rekt Capital had flagged this price point as a critical area to watch, while remaining optimistic about the long-term trend.
BTC/USD, he predicted, will “confirm” a breakout from the bear market in late March, provided the monthly close preserves the 200-week moving average (WMA) as support.
The 200WMA currently stands at around $25,500, giving bulls room for a modest dip.
Similarly, but on shorter time frames, is trader Crypto Tony, who looked at $27,700 and $26,600 to hold on for the day.
“We have yet to lose the EQ at $27,700 on a 4-hour time frame, so the doomsday tweets can take a break,” he in summaryreferring to the point in an area where buying and selling pressure is balanced.
“The range low of $26,600 is what we need to lose to initiate a short hedge position for myself.”
PCE data in focus as SVB is bought out
Unlike last week, the last few days of March are not expected to bring surprises from the US macroeconomic realm.
That’s not to say a curveball won’t pop up, but the rest of the month is relatively quiet in terms of macro data releases.
The only exception may be the March 31 release of the Personal Consumption Expenditures Index (PCE), which has crucial insight into US inflation trends.
“US PCE Inflation Figures Coming This Week – Last Month These Data Caused Volatile Move to Lower Risk,” Market Commentator Tedtalksmacro commented.
“However, this month core PCE is expected to cool to +4.4% y/y down from +4.7% previously. That would be risk positive.”
Should Bitcoin react to PCE data coming in outside of expectations, the results could make for a volatile weekend just a day before the end of the month.
Any new developments in the ongoing banking crisis will add uncertainty to the mix, and the risks are there – contagion remains in Europe, while defunct Silicon Valley Bank (SVB) found a buyer overnight.
After raising interest rates despite the crisis, the Fed is on a divergent path in terms of interest rates, and further increases could be coming, it said. In contrast, the markets have the opposite view due to the stress already induced by previous interest rate hikes.
“Much tighter economic conditions and ongoing signs of banking stress are the main reasons why the market believes the Fed will be forced to abandon its plans,” research platform Mosaic Asset explained in the latest edition of its update series, “The Market Mosaic,” on March 26 .
Related: Crypto winter can take a toll on hodlers’ mental health
Mosaic further warned that, historically, risky assets performed worse immediately after news of a rate hike.
“If the Fed halts its rate hike campaign, it will signal growing concerns that the central bank is breaking something in the capital markets. But also consider that the Fed has a track record of adjusting policy only when it’s too late,” it continued.
It added that “as a result, in previous bear markets, the steepest stock market declines occurred after the Fed pivoted to a pause or outright rate cut.”
BTC hodlers set up supply shock
Bitcoin hodlers are setting new records under current conditions and setting the stage for a supply shock in the process.
The last data from chain analytics firm Glassnode shows that the amount of available BTC supply, which has not left its wallet for two years or longer, is now at its peak.
As of March 27, more than 52.5% of all BTC mined have remained dormant since at least March 2021, with owners not selling or transferring during the subsequent bear market.
Address Number is also in “just up mode”, with the number of wallets holding 0.1 BTC or more setting new records for the day.
Similarly, wallets with a non-zero balance are more than ever, with 45,388,865 in existence as of March 27.
The numbers feed into an existing narrative of what will happen to BTC price action during the next wave of mainstream consumer interest.
With so much of the supply now ferried away to cold storage, any rush for BTC could spark the realization that one of the world’s most elusive assets is already too scarce.
According to Glassnode, the overall BTC balance held by major exchanges remains near the lowest in five years.
Bitcoin provides perfect timing
For some, BTC price action is on course to repeat previous cycles, setting a new all-time high in the process.
Among them is Tedtalksmacro, who notes that the timing of November’s BTC/USD multi-year low was more or less perfect.
Since then, a rally that began in January has held firm, and there have yet to be signs that new macro lows will look to take out the $15,600 floor from November 2022.
“~390 days until next BTC halving,” Tedtalksmacro wrote on March 27, referring to a dedicated thread on Bitcoin’s performance from late January.
The BTC price thus adheres to historical precedent by bottoming more than 400 days before the next halving of block subsidies.
Tedtalksmacro, meanwhile, isn’t the only popular commentator to consider halving cycle timing when it comes to price.
Earlier this month, Rekt Capital estimated that the next all-time high would be around 18 months from now.
“It takes BTC around 900 days to rally from the Downtrend breakout to the Bull Market peak,” he explained.
“If history repeats itself, $BTC will achieve a Bull Market Top in Summer 2025.”
Sentiment in the crypto market remains greedy
As with last week, a potential thorn in the side of Bitcoin’s bull run remains, coming from investors themselves.
Related: XRP, LTC, XMR and AVAX show bullish signs as Bitcoin struggles to hold $28K
Despite the volatility over the Fed rate hike and the inability to push closer to $30,000, Bitcoin has seen that kind of sentiment absent since its late 2021 highs.
According to the Crypto Fear & Greed Index, “greed” currently characterizes market sentiment in crypto more broadly.
On March 21, the index’s score reached 68/100, the highest since November 2021, and has continued to hover around the mid-60s since.
Although nowhere near “extreme” levels, the higher the index rises to greed, the more likely a market correction will occur.
The views, thoughts and opinions expressed herein are those of the authors alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
