Bitcoin price slips 5% after failing to break $ 60K – Here’s why

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Bitcoin price slips 5% after failing to break $ 60K - Here's why


The price of Bitcoin (BTC) fell below $ 56,000 on March 21 after repeated denials of the $ 60,000 resistance level over the past four days.

1 hour BTC / USD candle chart. Source: Tradingview

Although it has come close to clearly breaking through the key technical level, Bitcoin has shown weakness in the $ 59,000 to $ 60,500 range.

There are three major reasons for the stagnation: rising Treasury yields, bearish moves on Bitfinex, and the market’s struggle for risk.

High yields on U.S. Treasuries lead to collapse in risk markets

As the 10-year US Treasury yield rises, the appetite for risky assets tends to decline as investors may seek a safer, higher yielding alternative in Treasury bonds.

While Bitcoin has not experienced a close correlation with the Dow Jones, it has experienced a close correlation with technology-intensive indices, like the S&P 500.

This suggests that the strong momentum in US Treasuries is driving risky assets to stagnate, reducing the momentum of Bitcoin in tandem, as Cointelegraph previously reported.

US Treasury yields began to break above key levels from March 19. Bitcoin has since consolidated, struggling to rise above $ 60,000.

Holger Zschaepitz, Market Analyst at Welt, mentionned:

“T-bill yields have broken higher levels as bond traders have stepped up bets that the Fed will allow inflation to outpace the pace of the US economy’s recovery.

The 10-year Treasury yield exceeds 1.7%. Source: Bloomberg, Holger Zschaepitz

For Bitcoin to experience a sustainable rally, it needs to see a favorable macroeconomic landscape, which would only be possible thanks to the stabilization of USTreasury returns.

Sell ​​pressure on Bitfinex at resistance of $ 60K

According to a pseudonymous Bitcoin trader and technical analyst known as “Byzantine General,” there has been serious selling pressure on Bitfinex.

Other derivatives trading platforms, like Deribit, FTX and BitMEX, also registered decent short interest, the trader said.

The wrote:

“Yeah… The fuck is still not over.” Bitfinex is still unloading. There was a short, serious interest in Deribit, Mex and FTX. OI finally relaxes. “

Bitcoin price with short interest. Source: Tradingview.com, Byzantine general

The combination of an unfavorable macroeconomic landscape and selling pressure from both whales and derivatives traders has likely caused Bitcoin to consolidate below $ 60,000.

However, for the foreseeable future, the likelihood of a rescue rally could increase if the open interest in the futures market continues to dissipate.

The term open interest refers to the sum total of active positions in the futures market. When this decreases, it means that there is generally lower trading activity regarding derivatives.

There is a positive catalyst

Willy Woo, the chain’s prominent analyst, explained that Bitcoin has a good chance of not going below the trillion dollar market cap again.

Woo noted that the UTXO Realized Price Distribution (URPD) indicator, which shows the realized price of all UTXOs on a given day, indicates that the market cap of $ 1 trillion acts as a floor price. He mentionned:

“URPD: ‘7.3% of bitcoins were last moved at prices above $ 1T.’ That’s a pretty solid price validation; 1T $ is already strongly supported by investors. I would say there’s a good chance we’ll never see Bitcoin below $ 1T again. It’s only been 3 months since Bitcoin surpassed the all-time $ 19.7k high of the last macro cycle. But already 28.7% of bitcoins have been moved at prices above $ 19.7k. ”

Prize distribution carried out by UTXO. Source: Glassnode

On-chain data also indicates that while there has been short-term selling pressure, these moves are not large enough to suggest that the market is anticipating a prolonged correction.



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