Bitcoin [BTC] has been dealing with severe stress in recent months. The final capitulation of the bear market may still be a few months away, but macro market uncertainties impacted Bitcoin demand.
Analysts believed the $65,000 psychological support was crucial. As long as BTC traded above this price, the price action would remain constructive.
There were indications that the recent rally had stretched the market, based on the Fibonacci-Adjusted Market Mean Price model chart.
This supported the idea that the recent rally was nothing more than a bull trap, accelerated by Bitcoin’s short liquidations on its way above $70,000.
AMBCrypto reported that in the short term, $63.7k was the critical support level that traders should pay attention to.
Bitcoin’s rally is likely coming to an end
Crypto analyst Donkerfost pointed out that the crypto market was struggling in a tough environment for risky assets. BlackRock recently blocked investors from making withdrawals, further fueling the market’s FUD.
US non-farm payrolls data surprised analysts, showing a sharp decline while the labor market was expected to maintain its momentum and post gains.
Uncertain conditions are driving liquidity away from crypto as investors look to exit risky assets. Binance noted: $2 billion monthly outflows from stablecoins.
This massive figure comes after monthly outflows reached $6.7 billion in February before stabilizing.
Geopolitical tensions disrupted traffic flowing through the Strait of Hormuz, which accounts for nearly 25% of oil transported by sea.
This has caused oil prices to rise sharply, impacting inflation data and putting pressure on financial markets.
The analyst noted that such circumstances existed unfavorable for Bitcoin. They do not promote risk-taking investor sentiment and do not encourage capital flows into more speculative assets.
Gold gained value against Bitcoin, undermining the argument that Bitcoin is a hedge against volatility. Along with other developments, it appeared that the previous week’s rally to $74,000 was not sustainable.
Source: BTC/USDT on TradingView
The swing structure was firmly bearish. Beating the $73.1k level from the early February crash would have been a bullish signal of intent, but that didn’t materialize.
As things stand now, a move towards $62.9k seemed more likely than a BTC recovery to $66k.
Final summary
- The rally to $74,000 was accompanied by a host of bearish macro market developments.
- The price chart showed a quick return from the $73,000 supply zone, and the price structure remained bearish.