Bitcoin has not been trading all that well lately. The top cryptocurrency by market cap is working on its fourth straight weekly decline and made new one-month lows on Monday.
Currently bouncing from the session low, bitcoin is down about 0.5% as of this writing and is down more than 18% from its high just a few weeks ago.
At those highs, crypto was looking pretty good. Growth stocks were coming back to life, bitcoin had an impressive breakout and these “risk-on” assets were back to sporting bullish momentum.
That’s all changed now.
Growth stocks are rolling back over, gold is rallying and crypto is under pressure. Tech stocks and small caps are struggling, as are equities as a whole. That to me says we’re back in a “risk-off” environment at the moment.
Of course, all of that could change with a big rally in bonds, thus triggering a rally in tech stocks and perhaps some reverberations in the crypto market. But we don’t know that it would go down like that, even if the first domino — bonds — were to fall in our direction.
That all said, let’s look at the chart for bitcoin as it leans on a must-hold support level.
Scroll to Continue
Last week, bitcoin disappointed the bulls by failing to hold the midpoint of the channel and the 50-day moving average.
It’s now below all of its daily moving averages as the 10-day acts as active resistance. None of this is a good look for the bulls. However, bitcoin remains above uptrend support (blue line) and channel support.
Specifically, I’m looking at the cryptocurrency’s must-hold support area being near $37,000.
Near that mark, channel support and uptrend support come into play. Further, the March low sits down at $37,143. A break of $37,000 not only thrusts bitcoin below support, but also puts it in a monthly-down state.
While that could put the February low in play, this type of breakdown would actually have me looking for a potential retest of the 2022 low just below $33,000.
On the upside, let’s see if bitcoin can reclaim the 10-day. If it can do so, it puts it above active resistance and opens the door to higher prices. Specifically, it could open the door to the midpoint of the current channel (and put the 21-day and 50-day moving averages in play as a result).
Above this area and the $45,000 level could be back on the table.