The market for cryptocurrency is under significant downside pressure and fear as Bitcoin approaches the threatening $75,000 mark, stricken by the anticipated U.S. Consumer Price Index (CPI) print and a flurry of bearish technical indicators. The drastic $170 billion market wipeout within just 24 hours underscores the severity of the market downturn and further increases the uncertainty as it will lead to increased selling pressure.
Breaking Down a Sell-off: Liquidations and Bearish Signals
With Bitcoin’s prices dipped by 4.5% to $80,350, the market is trying to grasp the unanticipated and unexpected Bitcoin price movement, also termed as “shifting of sentiment”. Crypto assess Ali Martinez highlighted the sheer selling volume with over $1 billion worth of long Bitcoin positions liquidated in strident volatility.
Peter Brandt, the veteran trader, also adds to the bearish sentiments with the aid of his technical analysis. Brandt outlines three pivotal developments; the bearish pennant has been completed, a pennant retest has been done, and a double top has been completed. The double top structures that forms at $108,100 and a “deep retest” of the bygone high of $95,321, describes the strong reversal unit. The bearish pennant completion suggests continuation to the downside despite the temporary support at $81,513.
Target of 75K and Violent Volatility:
Brandt’s concerns are backed by the former BitMEX CEO, Arthur Hayes, who forecasts a potential revisit to $78,000 and then declines to $75,000. He states there will be “violent volatility” if Bitcoin goes to $70,000 and $75,000 due to the high open interest (OI) in options contracts around those strike prices.
The combination of all the technical analysis alongside the opinions of experts greatly undermine Bitcoin, as the $75,000 mark is set as a brutal zone of support. If it goes underneath this level, it can lead to a domino effect in liquidations that will worsen the state of the market.
Bear Market Concerns and ETF Outflows:
The growing pessimism around the market has made several analysts reserve their Bitcoin bullish sentiment and suggest that it slowly drifts into a bear market. The already lackluster sentiment pertaining to the Bitcoin Strategic Reserve’s purchasing activity seems to have further lowered investor sentiment when combined with new purchase commitment’s inactivity.
Also contributing to the negative sentiment of the market are the considerable outflows of Bitcoin spot ETFs. From March 3 to March 7, these ETFs suffered a whopping $799 million in net outflows, with $201 million coming from Fidelity’s FBTC. This retreat from institutional capital demonstrates a diminished demand for Bitcoin from major market participants.
The CPI Data and The Federal Reserve’s Position:
Everyone is waiting for the U.S. CPI figure for February, which is set to be unveiled on March 12. The information is anticipated to show how successfully the inflation control is progressing – one of the benchmarks to determine Fed policies in the long term.
The broader market predicts a 0.3% rise in the core CPI, excluding food and energy. The Federal Reserve is anticipated to remain on the side of caution when scrutinizing changes in fiscal policies. If the number comes out to be higher than economists predict, the already shaky financial markets could suffer further turmoil along with reinforcing the bearish sentiment towards Bitcoin.
GPS In The Cryptocurrency Market
The unstable technical sentiments of the industry, the fundamentals of its development, and the scope of economy all at once leads to unprecidented uncertainty in the cryptocurrency market.
Looking at a more pessimistic BTC price prediction, dives to $75,000 would imply the market is undergoing severe downturns. Rounding Federal governance and CBI numbers strengthens the gaze.
Restraining panic but safeguarding opportunities is highly recommended for any investor right now. These upcoming days and weeks will be highly indicative whether Bitcoin has the strength to march through starting from April 11th and day 19th, or would simply break under pressure of contradictions and bullish sentiments.
