Bitcoin (BTC) has faced serious tensions in recent months. The final capitulation of the bear market could happen in a few months, but macroeconomic uncertainties were affecting Bitcoin demand.
Analysts say the $65,000 in psychological support was essential. As long as BTC trades above this price, price action will remain constructive.
There was evidence that the recent rally had stretched the market, based on the Fibonacci-adjusted average market price model chart.
This supports the idea that the recent rally was nothing more than a bull trap, accelerated by the short sell-offs triggered by Bitcoin as it rose above $70,000.
AMBCrypto reported that in the short term, $63.7k was the critical support level traders should watch.
Bitcoin Rally Likely Coming to an End
Source: CryptoQuant Insights
Crypto analyst Darkfost highlighted that the crypto market is struggling amid a tough environment for risky assets. BlackRock recently blocked investors from making withdrawals, further reinforcing FUD in the market.
U.S. nonfarm payrolls data surprised analysts, showing a sharp decline when the labor market was expected to maintain momentum and post gains.
Uncertain conditions mean liquidity is leaving crypto as investors look to exit risky assets. Binance noted a monthly stablecoin outflow of $2 billion.
The mammoth figure comes after monthly outflows reached $6.7 billion in February before stabilizing.
Source: CryptoQuant Insights
Geopolitical tensions have disrupted traffic through the Strait of Hormuz, which accounts for nearly 25% of oil transported by sea.
This caused a sharp rise in oil prices, impacting inflation data and putting pressure on financial markets.
The analyst noted that these conditions were unfavorable for Bitcoin. They do not encourage risk-taking by investors and do not encourage capital flows towards more speculative assets.
Gold was gaining value against Bitcoin, deflating the argument that Bitcoin is a hedge against volatility. Taken together with other developments, it appeared that the previous week’s rally to $74,000 was unsustainable.
Source: BTC/USDT on TradingView
The swing structure was firmly bearish. Surpassing the $73.1k level from the early February crash would have been a signal of bullish intent, but that did not materialize.
As things stand, a move towards $62.9k seems more likely than a BTC recovery from $66k.
Final summary
- The rally to $74,000 was accompanied by a host of bearish macroeconomic developments.
- The price chart showed a rapid retracement from the $73,000 supply zone and the price structure remained bearish.
