The largest cryptocurrency has sealed seven days of practically flat performance despite some volatility in between as the market seeks fresh direction. Where could it go next?
In what was a week of more surprises from the macroeconomy, BTC/USD spent much time reacting to decisions from the United States Federal Reserve and associated commentary.
Next up, however, is a period of relative calm, followed by a key monthly close, which analysis says could see the start of a new bullish trend.
Bitcoin is currently up 20% for March, meaning that the coming days will decide the strength of the ongoing recovery from multi-year lows.
Cointelegraph takes a look at five key topics to bear in mind during the final week of what has been a volatile month.
Countdown to Bitcoin price monthly close
This meant that BTC/USD stayed practically unmoved versus the weekend prior, delivering some impressive stability despite the periods of volatility which occurred in the intervening period.
Nonetheless, concerns are brewing that the market may struggle to preserve current levels.
In a fresh analysis on March 27, popular Twitter account IncomeSharks flagged on-balance volume (OBV) as a telltale sign of decreasing momentum.
“Just hard to ignore the weak OBV at resistance, price at resistance, and the lack of demand at these prices,” it commented alongside a chart.
“If we drop we get a new wave of buying demand that should push us higher. Only way we go up from here is big news in the markets or another squeeze.”
Trader and analyst Rekt Capital agreed that a retracement would be “healthy” for Bitcoin should it enter.
“If BTC continues to struggle to break beyond $28,700 then a healthy dip may need to occur to gain fresh buyer interest at lower levels,” he tweeted on the day.
“Technicals are showing some short-term weakness & it could be that a catalyst will soon appear to play that weakness out.”
Over the weekend, Rekt Capital had flagged that price point as a critical area to watch while remaining upbeat about the longer-term trend.
BTC/USD, he forecast, will “confirm” a breakout from its bear market at the end of March, provided the monthly close preserves the 200-week moving average (WMA) as support.
The 200WMA currently stands at around $25,500, giving bulls room for a modest dip.
Similarly level-headed, but on shorter timeframes, is trader Crypto Tony, who eyed $27,700 and $26,600 to hold on the day.
“We have yet to lose the EQ at $27,700 on a 4 hour time frame, so the doomsday tweets can take a break,” he summarized, referring to the point in a range where buy and sell pressure is balanced.
“The range low at $26,600 is what we need to lose to begin a short hedge position for myself.”
PCE data in focus as SVB gets bought out
Unlike last week, the final days of March are not slated to deliver surprises from the U.S. macroeconomic realm.
That is not to say that a curveball will not appear, but the rest of the month is comparatively quiet in terms of macro data releases.
The one key exception could be the March 31 release of the Personal Consumption Expenditures Index (PCE), which holds crucial insights into U.S. inflation trends.
“US PCE inflation numbers are due this week – last month this data caused a volatile move lower in risk,” markets commentator Tedtalksmacro commented.
“However, this month core PCE is expected to cool to +4.4% YoY down from +4.7% previous. That would be risk positive.”
Should Bitcoin react to PCE data that comes in outside expectations, the results could make for a volatile weekend just a day before the monthly close.
Any new developments in the ongoing banking crisis would add uncertainty into the mix, and the risk is there — contagion remains in Europe, while the defunct Silicon Valley Bank (SVB) found a buyer overnight.
Having hiked interest rates despite the crisis, the Fed is on a diverging path when it comes to interest rates, and further hikes could come, it says. In contrast, markets hold the opposite opinion due to the stress already induced by prior rate increases.
“Much tighter financial conditions and ongoing signs of bank stress are major reasons why the market thinks the Fed will be forced to abandon their plans,” analysis platform Mosaic Asset explained in the latest edition of its updates series, “The Market Mosaic,” on March 26.
Mosaic further warned that historically, risk assets performed worse immediately following news of a rate hike policy pivot.
“If the Fed does pause the rate hiking campaign, it will signal growing concerns that the central bank is breaking something in the capital markets. But also consider that the Fed has a track record of adjusting policy only when it’s too late,” it continued.
It added that “as a result, in past bear markets the steepest stock market declines happened after the Fed pivots to a pause or outright rate cuts.”
BTC hodlers setting up supply shock
Bitcoin hodlers are setting new records under current conditions and laying the foundations for a supply shock in the process.
The latest data from on-chain analytics firm Glassnode shows that the amount of the available BTC supply, which has not left its wallet in two years or longer, is now at all-time highs.
As of March 27, more than 52.5% of all mined BTC has stayed dormant since at least March 2021, with owners not selling or transferring during the ensuing bear market.
Address numbers are also in “up only mode,” with the number of wallets holding 0.1 BTC or more setting new records on the day.
Likewise, wallets with a non-zero balance are more plentiful than ever, with 45,388,865 in existence as of March 27.
The numbers feed into an existing narrative over what will happen to BTC price action during the next wave of mainstream consumer interest.
With so much of the supply now ferreted away into cold storage, any rush for BTC could spark the realization that one of the world’s hardest assets is already too scarce.
According to Glassnode, the overall BTC balance held by major exchanges remains near its lowest in five years.
Bitcoin delivers perfect timing
For some, BTC price action is right on track for repeating past cycles, setting a new all-time high in the process.
Among them is Tedtalksmacro, who notes that the timing of the November multi-year lows on BTC/USD was more or less perfect.
Since then, a rally that began in January has stuck, and there have been no signs yet that fresh macro lows will appear to take out the $15,600 floor from November 2022.
“~390 days until the next BTC halving,” Tedtalksmacro wrote on March 27, referencing a dedicated thread about Bitcoin’s performance from the end of January.
BTC price is thus sticking to historical precedent by bottoming more than 400 days before its next block subsidy halving.
Tedtalksmacro, meanwhile, is not the only popular commentator taking halving cycle timing into account when it comes to price.
Earlier this month, Rekt Capital estimated that the next all-time high should be in around 18 months.
“It takes BTC around 900 days to rally from Downtrend breakout to Bull Market top,” he explained.
“If history repeats, $BTC will perform a Bull Market top in the Summer of 2025.”
Crypto market sentiment stays greedy
As with last week, a potential thorn remains in the side of Bitcoin’s bull run, which comes from investors themselves.
Despite the volatility over the Fed rate hike and inability to push closer to $30,000, Bitcoin has seen the kind of sentiment absent since its late 2021 all-time highs.
According to the Crypto Fear & Greed Index, “greed” presently characterizes market sentiment in crypto more broadly.
On March 21, the Index’s score hit 68/100, the most since November 2021, and has continued to circle the mid-60s since.
While not near “extreme” levels, the higher the Index rises into greed, the more likely a market correction will occur.