On the daily chart below, we can see that the fail to break the high at 25231 and the divergence with the MACD, has indeed led the price to pullback all the way down to the swing support at 21509. This is a key level for the market as a break lower would open the door for a bigger fall towards the support at 18152.
The buyers will try to defend this level but it will mostly come down to the next US economic data. The fundamentals for Bitcoin are increasingly bearish as the market prices a more hawkish Fed and a possible hard landing coming as a consequence.
In fact, the latest selloff was caused by Fed Chair Powell comments where he opened the door for a 50bps hike at the March meeting if the data comes out strong and a higher terminal rate. So, watch out for the NFP and CPI reports ahead as misses should lead to a rally in Bitcoin and beats to the breakout and a major selloff.
On the 4 hour chart below, we can see that the selloffs have been very strong and fast once the price broke out of the flag patterns. This may indicate that the buyers are weak and fold at any little sign of weakness.
The sellers, on the other hand, are in full control supported by the fundamentals and the technicals. The buyers now will need a break above the trendline to get back their conviction, but this is unlikely to happen unless US data starts to miss expectations.
On the 1 hour chart below, we can see that there’s a big divergence right near the key support level. This is a sign of weakening momentum probably because the market awaits key economic reports before committing to fresh positions.
The setup here looks very defined: if NFP tomorrow beats expectations, then we should get the break lower and the bear party ensuing, on the other hand, if the data misses expectations, the buyers will jump in aggressively and take the price to the first target at 22647.
