Bitcoin price sinks below $48K, but is the bull market in jeopardy?

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Bitcoin’s price fell below $48,000 in a big correction on Monday just before the U.S. market opened.

Bitcoin’s (BTC) price has been grinding nicely over the last few weeks, but there has been a major correction in the last 24 hours. BTC’s price fell by more than $10,000 from $58,000 to less than $48,000, a correction of almost 20%.

This pullback—which many expected as 28,000 BTC had been deposited with Gemini—also caused other cryptocurrencies to fall alongside Bitcoin, resulting in Bitcoin’s market supremacy increasing as a result.

But will history replicate and create a boring, remedial March? Let’s look at the maps.

 

Bearish divergence implying further downside to come

BTC/USDT 4-hour chart. Source: TradingView

Markets never go up in a straight line, and corrections must be made from time to time. This can be called a “reset” for the economy, which returns to the mean trend line and the euphoria fades.

At the first point of the correction, people still consider the corrective action to be a minor correction, although the feeling slowly begins to change. The longer the correction persists, the lower the price goes, the worse the feeling becomes.

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At the bottom, Bitcoin will again be deemed “dead” and a Ponzi scheme, after which the price has traditionally risen.

The key question now, however, is whether the market will see a prolonged correction or whether the price of Bitcoin will stay above the green box shown in the above map. The green box is the previous compression span, which should theoretically serve as a big help.

If the region is between $42,000 and $44,000, the upward continuation is possible. In that case, the $63,000 interest point is already on the table.

However, the bearish divergence and weakness at the beginning of this week suggest that there could be further downsides. In that regard, a loss of $42,000–$44,000 could lead to a further correction of $37,000.

 

March historically isn’t a bullish month

BTC/USD 1-week chart. Source: TradingView

The weekly chart for Bitcoin shows some beautiful historical data, which shows that March appears to be a time of correction or consolidation. Significant corrections have taken place in 2017, 2018 and 2020 during this time, while market action in 2016 and 2019 has taken place sideways.

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History is not guaranteed to repeat, of course, but history rhymes, and historical evidence also offers insight into how market cycles operate.

In that regard, the vital measure to track is the 21-week moving average (MA), which should prevent Bitcoin’s price from falling further. From that viewpoint, the current price level of the 21-week MA is $28,000, and in the coming weeks, it’s going to crawl up to $32,000 to $34,000.

As a result, the recent higher low is set at $30,000, which means that a further decline from $38,000 to $40,000 is not likely to be a normal 30 to 40 percent correction.

 

Critical levels to watch for Bitcoin

XBT/USD 1-day chart. Source: TradingView

Bitcoin’s daily chart shows some important levels to be tracked for the current cycle. First of all, the recent drop took the price of Bitcoin to a critical level of support. It should keep this region between $42,000 and $44,000 to prevent more downsides.

If this doesn’t hold, a further $37,000 drop is possible. This will also grant a re-test of the 21-week MA.

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However, if the green zone offers assistance between $42,000 and $44,000, the rebound is likely to be $63,000, as previously reported.

However, this is too early to label, as it has traditionally been, at the end of February and March, a remedial period, not a bullish period for markets in general.

 

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