Bitcoin (BTC) is currently hovering above the recently broken resistance of $74,000, positioning itself to reclaim price levels not seen since the fourth quarter of last year. However, this week’s activity will be turbulent, with market expert Virtual Bacon predicting that it could be “the most volatile week for Bitcoin all year.”
The bear market is winning
In report shared on social media platform X, Virtual Bacon noted that while the current upward trend in Bitcoin’s price is sanguine, significant challenges remain.
The critical 200-day straightforward moving average (SMA) is $93,000, while the 50-week SMA is around $98,000. The recent lower high resistance is pegged at $94,000, creating a convergence of resistance in the $93,000 to $98,000 range.
Simply put, there is a 15% downside risk to support levels at the lower $60,000 zone, compared to a 30% upside potential relative to resistance. Virtual Bacon emphasized that the chances of a rejection back to the previous range outweigh the possibility of a full breakout bull market.
“This does not mean that I am bearish,” he said, emphasizing that the analysis is based on numerical realities. “We remain in a bear market until BTC is firmly above the $94,000 to $98,000 resistance.”
Market volatility expected this week
Virtual Bacon’s concerns about expected volatility this week are attributed to several volatility catalysts. The first is the meeting of the Federal Open Market Committee (FOMC), which will be held on March 18-19.
The probability of no interest is 99.1%. interest rate cuts. However, the expert believes that any comments by Federal Reserve Chairman Jerome Powell – especially regarding a hawkish stance under the influence of oil-fueled inflation – could trigger a tough sell-off in the market.
Moreover, the same-day expiration of quarterly Bitcoin options increases the potential for dramatic market moves. Current options data indicates that bulky open interest is concentrated in the $74,000 to $75,000 range, suggesting prices may remain capped near that level until Friday’s option expiration.
Virtual Bacon noted that if Bitcoin’s price exceeds $75,000, it could rise to $80,000. However, if it falls below $70,000, it could reinforce the downtrend.
Ongoing geopolitical tensions surrounding oil prices could further complicate market conditions. The expert said that if oil prices approach $120 combined with the FOMC and quadruple magic events, the market could experience significant volatility.
Two scenarios for Bitcoin
According to the expert, two main scenarios should be considered by the end of the week. The first potential breakout will keep Bitcoin above $75,000 until Friday variability.
He said this could facilitate a move towards $80,000 and set the stage for renewed bullish sentiment as the market looks to rebound towards the critical resistance levels of $94,000 to $98,000 in the second quarter of the year.
The second scenario is a rejection at the $75,000 resistance level, leading to a decline at expiration back to the $63,000 to $70,000 range.
Virtual Bacon concludes that if such a decline occurs, the S&P 500 could break below the 200-day SMA, and oil prices could rise, pushing Bitcoin back into a long-term bear market, with scenarios suggesting prices could fall as low as $58,000 or even $43,000.
Featured image from OpenArt, chart from TradingView.com
