Traders Remain Bearish on Bitcoin Despite Recent Rebound

Bitcoin (BTC) has seen a notable rebound of 14% after hitting a four-month low near $76,600 on March 11. However, despite this recovery, many traders remain skeptical about the cryptocurrency’s ability to reach the $65,000 mark, citing various bearish indicators and market conditions.

Key Takeaways

• Bitcoin rebounded 14% after a significant drop but is still down 25% from its all-time high.
• Analysts point to bearish patterns and resistance levels that suggest further declines.
• Correlation with traditional equity markets raises concerns about Bitcoin’s future performance.

Bitcoin’s Recent Performance

After experiencing a sharp decline, Bitcoin’s price has struggled to maintain upward momentum. The cryptocurrency’s recent high of around $87,470 was met with resistance, leading to renewed bearish sentiment among traders. Analysts are closely monitoring the market for signs of a potential downturn.

Bearish Indicators in the Market

Several technical indicators suggest that Bitcoin may face further declines:

1. Dark Cloud Cover Pattern: This bearish pattern indicates that buyers attempted to push prices higher but were overpowered by sellers. The failure to close above the $90,000-$93,000 resistance zone suggests a lack of buying conviction.
2. Perfect Rejection at Resistance: Bitcoin’s inability to sustain above the $86,000-$88,000 resistance zone has increased the likelihood of a drop towards lower support levels around $77,000-$79,000. If this support fails, analysts predict a potential decline towards the $65,000-$74,000 range.
3. Bear Flag Formation: Analysts have noted that Bitcoin is forming a bear flag pattern, which typically indicates a continuation of the downtrend. A break below the $84,000 support could trigger a sell-off towards $72,000.

Correlation with Traditional Markets

Bitcoin’s performance is increasingly correlated with traditional equity markets, particularly the S&P 500 and Nasdaq 100. This correlation has intensified due to a broader decline in risk-on sentiment, influenced by external factors such as geopolitical tensions and economic uncertainties.

External Risks to Consider

Market experts, including Arthur Breitman, co-founder of Tezos, have highlighted the potential risks posed by a looming U.S. recession. Such external factors could further impact Bitcoin’s price trajectory, making it challenging for traders to maintain a bullish outlook.

Conclusion

While Bitcoin’s recent rebound offers a glimmer of hope, the prevailing bearish sentiment among traders suggests that the cryptocurrency may struggle to reach the $65,000 mark in the near future. With various technical indicators pointing towards potential declines and external economic risks looming, investors are advised to proceed with caution and conduct thorough research before making any trading decisions.