The Bitcoin (BTC) price has fallen lower, about 20% since its recent all-time high at $ 62,000 in mid-March. Since the cryptocurrency market is so volatile, this is most likely a wave. Another normal price decrease in the current bull cycle.
It is necessary to adjust to strengthen the momentum to go up further because the market cannot go up in a straight line. Additionally, the record $ 6 billion options contracts are expected to expire on March 26, which usually brings some volatility.
Bitcoin must reserve the $ 53K level in order to gain bullish momentum
The 4-hour chart shows a clear downtrend since the recent all-time high at $ 62,000 with bearish support / resistance flips.
In it, Bitcoin’s price was rejected by a key resistance zone at $ 56,500 in the latest rally after Tesla announced that it had begun accepting Bitcoin payments in the United States. Since BTC failed to break out of this level to move higher, new tests of the $ 53,000 support zone were inevitable.
The $ 53,000 support zone has weakened due to being tested multiple times in recent weeks, so the price broke below it on March 25 and dropped to as low as $ 51,500.
Hence, Bitcoin price must now regain the $ 53,200 – $ 53,800 zone to revive any upward momentum in the near term. If that doesn’t happen, the price is likely to drop to the next support zone between $ 49,500 and $ 51,500.
The overall structure of the uptrend remains strong
The daily chart of BTC / USD still paints a bullish outlook that shows higher lows and higher highs. In that view, even if Bitcoin corrects to as low as $ 44,000, the uptrend is still in effect.
In that regard, Bitcoin price currently has a strong support zone between $ 49,500 and $ 51,500 and is unlikely to drop further.
Additionally, the bearish divergence is not confirmed until the market starts making lower lows and lower highs below $ 44,000, as outlined above.
The dollar shows strength
The US dollar is showing strength once again as yields are also increasing significantly. So it’s not surprising to see risky assets drop, namely commodities and cryptocurrencies.
A rebound in USD often leads to a downtrend in the cryptocurrency market, especially in the short term. But this latest rally in the dollar may be temporary as it is approaching a stiff resistance. Furthermore, the structure still shows lower highs and lower lows, meaning a trend reversal is likely to happen soon.
Hence, if the dollar’s rally is stalled, then Bitcoin and the crypto market will be more likely to rise in price.
A possible scenario for Bitcoin
Bitcoin’s 4-hour chart shows a downtrend, where a retest of the $ 53,200 – $ 53,800 zone is likely to be rejected. Therefore, a further decline in the short term is the most likely scenario at the moment.
The green area shown in the chart above is the area to watch for potential bullish divergence or immediate bounce. If such a move occurs, the ideal scenario for the bulls will then be to establish a higher low.
Once a higher low is established, Bitcoin price will continue to rise towards the next key points of $ 68,000 and $ 82,000.