Bitcoin (BTC) is currently hovering above the recently broken resistance at $74,000, positioning itself to reclaim price levels not seen since the fourth quarter of last year. However, this week’s activity will be turbulent, with market expert Virtual Bacon predicting that this could be the “most volatile week in Bitcoin all year.”
The bear market has the upper hand
In one report Virtual Bacon, shared on social media platform
The critical 200-day simple moving average (SMA) is at $93,000, while the 50-week SMA is around $98,000. The latest lower high resistance is set at $94,000, creating a convergence of resistance in the $93,000 to $98,000 range.
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Simply put, there is a 15% downside risk to the support levels in the low $60,000 zone, while there is a 30% upside potential to resistance. Virtual Bacon emphasized that the chances of a rejection to the previous range are greater than the possibility of a complete breakout to one bull market.
“It’s not that I’m bearish,” he stated, emphasizing that the analysis is based on numerical realities. “We will remain in a bear market until BTC definitively breaks above the $94,000 to $98,000 resistance.”
Market volatility expected this week
Virtual Bacon’s concerns about expected volatility this week are attributed to several volatility catalysts. The first is the Federal Open Market Committee (FOMC) meeting, which takes place March 18-19.
There is a 99.1% chance that there is no interest interest rate cuts. However, the expert believes that any comments from Federal Reserve Chairman Jerome Powell (especially on hawkish stances driven by oil-driven inflation) could trigger a sell-off in the hard market.
Furthermore, expiration of quarterly Bitcoin options on the same day increases the potential for dramatic market movements. Current options data points to wide open interest around $74,000 to $75,000, suggesting prices may remain contained around this level until Friday’s expiration.
Virtual Bacon noted that if the Bitcoin price rises above $75,000, it could rise to $80,000. However, if the price falls below $70,000, it could strengthen the downtrend.
The ongoing one geopolitical tensions Surrounding oil prices could further complicate market conditions. The expert argued that as oil prices approach $120, coupled with FOMC and quadruple witch events, the market could experience significant instability.
Two scenarios for Bitcoin
According to the expert, there are two main scenarios to take into account by the end of the week. The first, a potential breakout, would see Bitcoin remain above the $75,000 mark through Friday inconstancy.
He said this could facilitate a move towards $80,000 and set the stage for renewed bullish sentiment as the market looks for a recovery towards the critical resistance level of $94,000 to $98,000 in the second quarter of the year.
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The second scenario involves a rejection at the $75,000 resistance level, leading to a post-expiration decline back to the $63,000 to $70,000 range.
Virtual Bacon concludes that if such a decline occurs, the S&P 500 could break below its 200-day SMA. and oil prices could escalate, pushing Bitcoin back into prolonged bear market conditions, with scenarios suggesting prices could fall to $58,000 or even $43,000.
Featured image from OpenArt, chart from TradingView.com