Bitcoin (BTC) enters the final week of March with the potential to reach its previous all-time highs. The price of BTC is showing renewed strength as the market continues to consolidate higher. Can the bulls push the price back to its previous peak and continue the upward trend?
Last week, Bitcoin experienced significant losses, with a retracement of over 17% from its all-time high of $74,000. While this correction is relatively modest compared to previous bull market corrections, it caused concern among many investors.
However, this week presents a different landscape. The CME futures markets now have a downside gap, which is a bullish signal. Investors are anticipating a fresh attack on the previous highs, and there is a general sense of optimism in the market.
In addition to Bitcoin’s performance, there are other macroeconomic triggers that could potentially add volatility to risk assets. These factors will be closely monitored in the coming weeks.
Looking at the BTC price action, the weekend was mostly positive for Bitcoin bulls. The price slowly climbed higher and closed the week just below $67,200 on Bitstamp. While this is slightly lower than the previous week, it negated most of the recent losses that occurred on March 20 when BTC/USD dropped below $61,000.
Analysts are now keeping an eye on the downside gap in the CME futures markets. These gaps often act as price magnets, with BTC/USD filling them within days or even hours when the new trading week begins.
Despite the recent positive price action, some market participants remain cautious about the strength of the Bitcoin bull market. Various oscillators, including the Relative Strength Index (RSI), are signaling a potential trend reversal. A close above $69.1K is needed for the bulls to regain momentum.
However, other indicators, such as the daily RSI and the daily Moving Average Convergence/Divergence (MACD), suggest a more positive outlook for Bitcoin. These indicators indicate a breakout from previous downtrends, which could lead to further price increases.
Another factor that could impact Bitcoin’s price is the performance of United States-based spot Bitcoin exchange-traded funds (ETFs). Last week, these ETFs experienced net negative flows for five consecutive days, which was unusual. However, market commentators are hoping for a return to positive flows, which could have a positive impact on the BTC price.
The upcoming release of the Personal Consumption Expenditures (PCE) Index in the US could also impact Bitcoin and other risk assets. This index is the Federal Reserve’s preferred inflation measure, and any significant changes could influence the Fed’s monetary policy decisions.
Despite recent price volatility, Bitcoin network fundamentals remain strong. Mining difficulty is expected to remain at or near all-time highs, and the hash rate continues to increase. However, miners are preparing for the upcoming block subsidy halving, which will reduce the number of BTC generated per block.
While the overall sentiment in the crypto market may still be greedy, mainstream interest in Bitcoin appears to be waning. Google search volume for Bitcoin has decreased from its previous highs, indicating a lack of mainstream “FOMO” (Fear of Missing Out). However, the Crypto Fear and Greed Index remains in the “extreme greed” zone.
In conclusion, Bitcoin’s price is showing signs of strength as it approaches its previous all-time highs. The market is optimistic about a return to price discovery, and various indicators suggest a positive outlook for BTC. However, caution is advised, and investors should conduct their own research before making any investment decisions.