By Chris Hollingworth 
Bitcoin (BTC) is currently facing a challenging battle as bulls attempt to defend the $94,000 level against persistent selling pressure from bears. The cryptocurrency’s lackluster price performance, coupled with escalating trade tensions between the US and China and subdued expectations for interest rate hikes by the US Federal Reserve, have dampened investor sentiment. Recent data from SoSoValue shows that US-based spot Bitcoin exchange-traded funds experienced outflows totaling $1.14 billion over the past two weeks.
Despite the prevailing market conditions, Michael Saylor’s Strategy, previously known as MicroStrategy, remains optimistic and continues to expand its Bitcoin holdings. The firm recently acquired 20,356 Bitcoin for $1.99 billion at an average price of $97,514, boosting its total holdings to 499,096 Bitcoin.
Bitcoin’s price movement has led to a decrease in its 1-week realized volatility to 23.42%, according to Glassnode, a provider of on-chain analytics. Historical data suggests that periods of similar volatility compression have often preceded significant market shifts. The question now arises: could Bitcoin be poised for a downside break, and what key support levels should investors monitor?
Turning to the broader market, the S&P 500 Index reached a new all-time high of 6,147 on February 19 but struggled to maintain momentum, slipping below the critical 6,128 resistance level. A retreat below the 20-day exponential moving average at 6,057 could signal further downside potential, with the 50-day simple moving average at 6,008 serving as a key support level to watch.
Meanwhile, the US Dollar Index (DXY) has been edging lower towards robust support at 105.42. A break and close above the 20-day EMA at 107.36 could pave the way for a potential rally towards 108, while a failure to surpass this level may increase the risk of a breakdown below 105.42.
In the cryptocurrency realm, Bitcoin has been confined within a narrow range of $100,000 to $93,388, indicating a standoff between buyers and sellers. A breach below $93,388 could trigger a decline towards critical support at $90,000, while a breakout above $100,000 may signal renewed bullish momentum, potentially driving prices towards $106,500.
Ether (ETH), the second-largest cryptocurrency by market capitalization, struggled to surpass the $2,850 level recently, suggesting waning demand at higher price points. Failure to hold above the 20-day EMA at $2,765 could lead to a decline towards $2,500, with further downside potential towards $2,300. A breakout above the downtrend line is crucial for Ether to stage a comeback and target levels around $3,450 and $3,750.
As market dynamics evolve and key technical levels are tested, investors are advised to closely monitor price movements and market indicators to navigate the current environment effectively.
