Bitcoin fell below $90,000 today, extending its decline from last month’s all-time high as economic concerns continued to weigh on investor confidence. The cryptocurrency briefly fell below $86,000 before recovering to around $89,000.
The slowdown comes amid confirmation that planned tariffs on Mexico and Canada will go ahead, a policy decision that has raised inflation fears. Tariffs are often seen as inflationary by investors, which could reduce the likelihood of interest rate cuts this year, an outcome that could hit risk-sensitive assets like Bitcoin.
Market outlook and historical trends
Historically, March has been an unpredictable month for Bitcoin, showing both gains and losses in previous years. Since the beginning of the year, Bitcoin has declined 5%, although it is still up approximately 25% since the US presidential election. Optimism around a crypto-friendly legislative approach has provided some support, but market volatility remains high.
Technical Analysis: Key Price Levels
Double Top Formation and Momentum Change
Bitcoin’s recent price action has formed a classic double top pattern, with two peaks appearing between December and January. The recent break below the pattern neckline, accompanied by above-average trading volume, reinforces a bearish outlook.
Furthermore, a divergence in the Relative Strength Index (RSI) suggests weakening momentum. However, the RSI has now entered oversold territory, indicating potential for near-term recoveries.
Support and resistance levels to consider
Key Support Levels
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$80,400: This level aligns with the 200-day moving average and a strong previous support zone from mid-November, making it a critical area for buyers.
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$74,000: If Bitcoin continues to fall, this region could act as a strong support level as it lines up with multiple past resistance points that have since become potential buy zones.
Main resistance levels
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$98,500: A bounce above the double top neckline could push Bitcoin towards this level, where the 50-day moving average currently resides.
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$106,000: If momentum strengthens, Bitcoin could retest this level, which corresponds with previous peaks in the double top formation.
The future of Bitcoin will largely depend on how investors respond to the current market situation. If inflation concerns ease or there is a greater possibility of interest rate cuts, we could see Bitcoin recover. But if economic concerns persist, the downward trend could continue.
For now, traders and long-term investors are closely monitoring key price levels to see where Bitcoin could stabilize or face resistance in the coming days.
Also read: Bitcoin falls below $90,000 as crypto market faces sharp sell-off