The price of Bitcoin (BTC) has failed to break above the psychological $50,000 resistance going into the weekend and has dropped below the $48,000 level on March 6.
Tone Vays: BTC must close above $50K to resume bull run
Now traders are watching whether BTC/USD can break above the $50,000 level to resume the bull cycle. Conversely, a drop below the recent lows below $46,000 will likely open the door to new lower lows, which may then pose a threat to the bull run that has been in place for almost a year, at least in the short to medium term.
“This is not good….a close above $50,000 makes me incredibly bullish but a close below $45,000 makes me incredibly bearish,” said popular trader Tone Vays in his latest podcast episode, continuing:
“Not incredibly bearish, but bearish down to the low $40,000s, maybe even lower. Right now we’re in a completely no-trade zone.”
Additionally, fellow pseudonymous trader Rekt Capital pointed out similar price levels to watch. If BTC fails to hold the current levels above $46,000, the trader expects Bitcoin to bottom somewhere in the area between $38,000 and $45,000 despite Bitcoin posting higher lows in recent days.
“BTC higher lows hold until they don’t,” he wrote. “Each subsequent reaction from the January HL was lesser and lesser. Could be the same now. Better to be safe than sorry by preparing for a potential breakdown from this HL.”
#BTC Higher Lows hold
Until they don’t
Each subsequent reaction from the January HL was lesser & lesser
Could be the same now
Better to be safe than sorry by preparing for a potential breakdown from this HL
— Rekt Capital (@rektcapital) March 6, 2021
Macroeconomic headwinds for Bitcoin
As Cointelegraph reported, Bitcoin is seeing downward pressure from macroeconomic headwinds. A sharp spike in 10-year U.S. Treasury yields and a pullback in tech stocks, in particular, are weighing on cryptocurrency prices as investors flee risk-on assets.
Meanwhile, the Dollar currency index, or DXY, has broken through technical resistance, hitting the highest levels since November 2020.
Cointelegraph Markets analyst Michael van de Poppe points out that Bitcoin’s downtrend remains intact after the latest attempt to break $50,000 failed.
“This means that the trend is still down and overall weakness on the markets in the short term,” he explained. ”$50,000 is so far a no-go for Bitcoin.”
However, Bitcoin, as well as gold, may see some respite soon as the DXY and Treasury yields are nearing their own technical resistance levels.
“I believe that the yields are getting topped out relatively soon including the DXY,” explained van de Poppe. “Both are in resistance areas, which means that we should be close to a top formation on these two, but also on a bottom formation for Bitcoin and gold relatively soon.”
March is often a bad month for markets and history repeats itself. So macro-wise, we’re still bullish on the cycle and heating up for continuation, despite the recent interest in yields.”