Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
- BTC broke below an ascending line.
- The 90-day Mean Coin Age increased despite fluctuating sentiment.
Bitcoin [BTC] dropped sharply on 2 March following Silvergate’s woes. Major crypto clients like Coinbase suspended business with the troubled Silvergate bank sending its stocks to plunge over 50%.
Investors reacted cautiously to the development, as some retreated to stablecoins, leaving most of the crypto market in the red, as shown below.
Read Bitcoin [BTC] Price Prediction 2023-23
Source: Coin360 (Daily crypto market performance on March 3, 2023)
BTC broke below an ascending line
Source: BTC/USDT on TradingView
BTC posted solid gains after jumping from $16.61K in early January to $25.25K in February. In the past few weeks, $22.63K has been steady support, showing bulls weren’t willing to exit yet. However, Silvergate’s woes on 2 March tipped bears to breach the support.
In addition, BTC broke a key ascending line below, flipping the market into a bearish structure. Bears must overcome two hurdles to dent any prevailing bullish sentiment completely.
At press time, they struggled to bypass the 50-day EMA (exponential Moving Average) of $22,373. If bears succeed in pushing BTC below the 50-day EMA, they have another hurdle at 100-day EMA ($21,204) to bypass.
On the contrary, the failure of bears to overcome the above hurdles could attract a new buying spree. It could push the BTC price toward the overhead resistance of $25.25K. But bulls will only gain leverage if BTC price action is above the ascending line and $21K support is solidly secured.
The RSI showed increased divergence with price action since mid-January, reiterating the weakening uptrend momentum. Moreover, the retreating Average Directional Index (ADX) confirms the weak uptrend and suggests a potential retracement or consolidation.
Mean Coin Age rose despite the negative weighted sentiment
Source: Santiment
According to Santiment, BTC’s sentiment remained negative in the past few days after sustaining fluctuations a couple of weeks before.
However, the 90-day Mean Coin Age rose steadily in the same period, indicating a wide-network accumulation – a bullish signal which suggests a potential rally ahead.
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Notably, sharp drops in BTC prices are often accompanied by spikes in stablecoins held by investors.
Interestingly, the sharp drop witnessed at press time didn’t correspond to a significant spike in stablecoins held by whales. It shows investors aren’t exiting yet, painting a bullish outlook if bulls defend the $21K support.