New York, New York – Bitcoin’s value plummeted below $90,000 to reach a three-month low today, extending a decline from its recent record high, signaling investor apprehension amidst economic uncertainty.
The digital currency breached the neckline of a double top pattern in Tuesday’s trading session, confirming the formation on higher-than-average volume. Analysts advise investors to keep a close eye on critical support levels on Bitcoin’s chart, specifically at $80,400 and $74,000, while also monitoring key resistance levels near $98,500 and $106,000.
Today saw Bitcoin (BTCUSD) fall below $90,000 as concerns over economic instability influenced investor sentiment. Reports of the Trump administration proceeding with tariffs on Mexico and Canada caused the cryptocurrency’s price to drop, as investors fear inflation tied to tariffs could deter potential interest rate cuts, impacting non-yielding assets like Bitcoin.
Historically, March has produced mixed results for Bitcoin, with an equal number of positive and negative returns recorded each month from 2013 to last year. Despite a 5% decrease since the beginning of the year, Bitcoin has still seen a 25% increase since the U.S. presidential election, reflecting hopes for favorable policies supporting the asset class under the Trump White House and a crypto-friendly Congress.
Analyzing Bitcoin’s chart, it is evident that the cryptocurrency has been following a downward trajectory since forming two peaks in December and January, culminating in a double top pattern’s formation. Recent trading sessions have seen a breakdown below the neckline on an uptick in volume, confirming this pattern.
Although Bitcoin experienced a slight increase in price last month, the relative strength index (RSI) revealed a weaker peak, indicating a bearish divergence and weakening price momentum. However, intense selling pressure has pushed the RSI into oversold territory, potentially setting the stage for short-term price upswings.
Investors are advised to take note of key support and resistance levels on Bitcoin’s chart. A breach below the double top’s neckline could lead to a drop to the $80,400 level, where the 200-day moving average and significant price action support may stabilize the price. The $74,000 level also stands out as a crucial support area, presenting a potential buying opportunity near historical chart peaks.
On the flip side, a recovery above the double top’s neckline may propel Bitcoin’s price towards the $98,500 level, where resistance could be observed near the 50-day moving average. Further upside could see a retest of the $106,000 level, enticing some investors to take profits.
In conclusion, fluctuations in Bitcoin’s price reflect ongoing economic uncertainties and geopolitical factors shaping investor sentiment. It is essential for investors to remain vigilant and closely monitor critical support and resistance levels in the coming days to gauge potential price movements accurately.