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Bitcoin (BTC) came under severe selling pressure over the past three days with crypto investors fleeing to the safety of stablecoins. This saw the no.1 cryptocurrency drop from $70k to $61.8k, as of the time of writing.
This represented a 12% drop for the king coin over the time period. However, the price action of BTC currently lies at a critical price point. Is a rebound possible or will BTC experience more dips? Let’s examine the potential price factors.
Blockhead
Will This Strong Buy Zone Halt Selling Pressure?
Analyzing BTC’s price action on the four hour time highlighted the $61.7k support level as a key buying level for BTC bulls. This was evidenced by the strong pump from the level earlier in March with BTC producing a swift 10% rise from the critical support level within 24 hours.
A repeat of this price action could occur due to a few underlying factors. While the Relative Strength Index (RSI) highlighted the selling pressure, hovering over the oversold zone, BTC’s capital inflows (CMF) remained positive. This indicated that traders/investors were willing to deploy more funds to buy the dip in anticipation of a price increase.
Despite the tendency for a strong reversal, a strong bullish pump from the support zone will have to contend with the nearby resistance at $64.7k. If buyers clear this hurdle, BTC could make a remarkable recovery back to the $68k price zone in the near term.
Positive Funding Rates Could Accelerate Price Rebound
Data from Coinalyze showed that BTC’s funding rate remained positive on the four-hour timeframe. A positive funding rate occurs when the futures market price is above the spot price, indicating bullish market sentiment.
This could translate to an accelerated price rebound for BTC in the short to medium term with attendant effect on other cryptocurrencies.
Disclaimer: This article does not constitute trading, investment, financial, or other types of advice. It is solely the writer’s opinion. Please conduct your due diligence before making any trading or investment decisions.
