Bitcoin (BTC) made a big jump on Tuesday night. This price increase was the result of new cryptocurrency regulations in the US. The first details leaked out and it appeared that the US is not going to implement strict measures for the time being. That took a lot of the fear out of the market.
Bitcoin is falling again
From bitcoin price arrived at $42,000 yesterday morning. However, bitcoin did not manage to get a good grip on this and the price continued to struggle with this level for the rest of the day. Bitcoin failed to move beyond USD 42,400 and Bitcoin lost traction at USD 42,000 last night.
Bitcoin then dropped to $40,900 and a few hours later the price lost its grip on this too. Then bitcoin plummeted to $39,300. At the time of writing, bitcoin also appears to be struggling to hold on to this, coming in at 39,250 at the time of writing. Binance and €35,500 on Battle.
$ BTC looks on pause at a few key levels. Today’s move may have been following TradFi, which has been volatile. To the upside $44.4k would paint a double bottom and $45.4k would avoid a double top. To the downside best to hold $40.6k followed by $39.3k https://t.co/S9xWGDX3en
— Decentrader (@decentrader) March 9, 2022
Long squeeze and symmetrical triangle
The most recent increase was accompanied by a so-called short squeeze† That price increase led to the liquidation of a series of short positions, which accelerated the increase. Once again, last night’s decline was accompanied by a long squeeze† About $50 million in bitcoin positions were liquidated last night. Some investors may have been a little too hopeful after the recent rise.
The hope was that this time bitcoin might have enough momentum to finally break through $44,000 – $45,000. However, this time the resistance around USD 42,000 was already too strong. So that might be a lower high may be BTC establishing here. Should bitcoin become a rebound make around this $39,300, then that might also be a higher low can be. That means bitcoin may be moving in an increasingly tighter range, forming a so-called symmetrical triangle. An increase in volatility and a breakout in the price are usually the result.
The news has gotten better for bitcoin lately, but technically speaking there is not much to say until we see a breakout from these triangles. pic.twitter.com/Dz8CZRjUGo
— Jurrien Timmer (@TimmerFidelity) March 9, 2022
More volatility is expected
More volatility is expected anyway. Later today the consumer price index (CPI) published. US inflation figures are expected to hit 8%, the highest since 1982. Then we have the Federal Open Market Committee (FOMC) meeting next week where the Federal Reserve is likely to announce a rate hike. In the meantime, the market expects that these will turn out to be less high than previously expected.
CPI in the news so let me take this opportunity to share #Bitcoin‘s inflation rate, currently at around 1.69% and systemically programmed to decrease over time. pic.twitter.com/yqNWppD2Vi
— On-Chain College (@OnChainCollege) March 9, 2022
In the meantime sketching on-chain data still a bullish image of the whole; the market seems to be in an accumulation phase. Despite this, bitcoin must first turn the resistance at USD 42,000 into support. Then the price has to break through the area around $45,000 – $47,000 before we can speak of a trend reversal. For now, bitcoin will remain fixed in its current range.
Big boost in Number of New Entities (new people buying #BTC) last week. Broke through a pretty rough downtrend which started after the prev. ATH @glassnode pic.twitter.com/wyaiODI6TC
— a.rhythmic (@a_rhythmic) March 10, 2022
The number of #Bitcoin accumulation addresses has gone parabolic over the last month.
Addresses that have at least 2 incoming non-dust transfers & have NEVER spent funds #BTC
To account for lost coins, addresses that were last active more than 7 years ago are omitted as well. pic.twitter.com/zFi63nlTst
— Plan©️ (@TheRealPlanC) March 10, 2022
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