Is BTC Price Set To Rebound After Its Sharp Decline? Analyst Marks Potential Breakout Levels For Bitcoin
With hotter-than-anticipated economic data released in February, uncertainty over inflation has increased, and the U.S. stock market is now at a crucial crossroads. Despite growing concerns among investors, the economy displays signs of resilience that may help safeguard Bitcoin against a significant downward shift. Although Bitcoin investors are advised to remain cautious until the release of new economic data and the United States Federal Reserve meeting in March, specific indicators propose that the worst scenario is still in the game regarding fresh BTC lows.
Bitcoin’s Sharp Decline Leaves Investors in Despair
On Friday, the decline of Bitcoin (BTC) was initiated by concerns surrounding the crypto-friendly bank Silvergate (SI), causing the removal of bullish leverage from the futures market. Glassnode’s data shows that during Asian hours, exchanges liquidated longs or bullish Bitcoin futures, which amounted to more than $62 million, the largest sum since August. Additionally, there were short liquidations worth just over $500,000.
Investors in Bitcoin who are still reeling from the shock of recent failures in cryptocurrency companies and banking issues may encounter yet another potential issue: a recovering United States dollar. Currently, there is a widespread belief that the appreciation of the U.S. dollar against other major global currencies, as indicated by the DXY index, will have an adverse effect on Bitcoin.
On March 3, On-chain data from the crypto analysis platform IntoTheBlock, revealed that Bitcoin has fallen below a significant demand zone at $23,000. This decline has resulted in a robust downward momentum, and Bitcoin may potentially retest levels below $20,000. Despite this, there is still a chance for BTC to make a comeback if it surpasses the $23,700 barrier.
What Is Waiting For BTC Price Next?
Bitcoin price has just hit its two-week low, creating a challenging situation for a bullish reversal. An extension in the bearish rally will further weaken investors’ sentiment and bring significant losses as buyers previously opened massive long positions near the $24K level.
As of writing, Bitcoin trades at $22.4K, declining over 3.4% in the last 24 hours. BTC price has recently broken below its crucial support level of $22.5K and aims to trade below its 0.31 Fib levels in the next few hours. However, there is still hope for investors, as positive news near the $22K level will prevent Bitcoin from dropping to the $20K level.
A breakout above the SMA-200 trend line at $23.2K will send the asset to $25K again, from which a smooth upward rally to $28K can be witnessed.
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Shayan is a digital nomad and a professional journalist. He delivers high-quality engaging articles to Coinpedia through his in-depth research and analysis.