Bitcoin Price Correction Continues as Demand Pressure Keeps Recovery Intact
The price of Bitcoin, the largest cryptocurrency by market cap, has been experiencing a correction trend over the past two weeks. After reaching a new all-time high of $73,750, the BTC price has dropped by over 17.5% and is currently seeking support at $60,000. While the asset is trying to recover from this psychological level, further correction can be expected in the coming week.
Demand Pressure at $60K Supports Recovery
In March, Bitcoin holders have experienced a roller coaster ride. The first half of the month brought optimism with new highs, but the second half has shown signs of a significant correction. Currently trading at $65,115, Bitcoin has found support at the confluence of $60,000 and the 38.2% Fibonacci retracement level.
While this newfound support is bolstering buyers for a potential recovery, there is also increasing outflow in BTC exchange-traded funds (ETFs), which is adding supply pressure to the market. On March 22, there was a total net outflow of $51.6 million in Bitcoin spot ETFs, with Grayscaleโs GBTC experiencing a single-day net outflow of $169 million.
Bitcoin Volatility Increases as Dormant Tokens Enter the Market
A notable shift in Bitcoinโs trading dynamics has recently occurred. There has been an unprecedented activation of dormant Bitcoin tokens, marking the largest movement of such tokens in the past two years. This activation is seen as a signal of impending market movements and can potentially lead to increased trading volatility.
Technical Indicators
- Exponential Moving Average: The BTC price remains bullish as it is above the 100-day and 200-day moving averages.
- Vortex Indicator: The bearish crossover between VI+ (blue) and VI- (pink) slope indicates that sellers are gaining strength in the market.
If the supply pressure continues, Bitcoinโs price could break below $60,000 and seek support at the 50% retracement level of $56,250. However, a retracement phase at this level is considered healthy and necessary for the market to recover its bullish momentum. If buyers manage to sustain above these support levels, Bitcoinโs price could rebound strongly in the coming weeks and aim to surpass its previous high of $73,750.
Hot Take: Bitcoin Price Correction and Volatility Ahead
The ongoing correction in Bitcoinโs price and the activation of dormant tokens in the market indicate that volatility is likely to persist in the near future. While a retracement phase is healthy for the market, there is a possibility of further downside if key support levels are breached.
As an investor or trader, it is important to closely monitor these developments and adjust your strategy accordingly. Keep an eye on the demand pressure at $60,000 and the potential impact of dormant tokens entering the market. Technical indicators can provide additional insights into market trends and sentiment.
Remember that cryptocurrency markets are highly volatile and unpredictable. It is crucial to do your own research, stay informed about market developments, and make informed decisions based on your risk tolerance and investment goals.
Stay updated with the latest news and analysis to navigate through this period of price correction and volatility. Good luck with your crypto journey!
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