San Francisco, CA – Bitcoin has experienced a significant drop below $90,000, reaching a three-month low on Tuesday. This decline follows a previous record high set last month, with economic uncertainty playing a key role in investor sentiment. The cryptocurrency’s price fell below $86,000 earlier in the day but has rebounded to around $89,000 recently. This downward pressure can be attributed to news of the Trump administration’s tariffs on Mexico and Canada proceeding as planned, as investors typically perceive tariffs as inflationary. The potential impact on interest rate cuts could weigh on non-yielding assets like bitcoin.
March has historically been a mixed month for Bitcoin, with data from crypto analytics site Coinglass showing an even balance of positive and negative returns for the cryptocurrency since 2013. Despite a 5% slip since the beginning of the year, Bitcoin remains up approximately 25% since the U.S. presidential election, thanks to expectations that the Trump administration and a crypto-friendly Congress will implement policies supportive of the asset class.
Bitcoin’s price has continued to trend lower after forming two distinct peaks between December and January, creating a double top pattern. The cryptocurrency experienced a breakdown below the neckline on above-average volume during Tuesday’s trading session, confirming the formation. While recent selling has pushed the relative strength index into oversold territory, suggesting possible near-term upswings, investors are closely monitoring support and resistance levels on Bitcoin’s chart.
If the price falls below the double top’s neckline, a move towards the $80,400 level is possible for Bitcoin, potentially finding support near the 200-day moving average and specific opening and closing prices of key bars from a previous move higher. Another crucial support level to watch is around $74,000, with investors considering this region as a buying opportunity due to its proximity to a horizontal line connecting various peaks on the chart from March to October last year.
On the other hand, a recovery above the double top’s neckline could lead Bitcoin’s price to the $98,500 level, where overhead resistance may occur near the 50-day moving average. Furthermore, breaking through this level could prompt a retest of $106,000, where investors who have averaged down may consider taking profits near the pattern’s two peaks. These critical levels are essential as investors navigate Bitcoin’s price movements and assess potential buying or selling opportunities.
As investors continue to analyze Bitcoin’s chart and consider technical analysis, the current market conditions suggest a cautious approach when monitoring support and resistance levels. The evolving economic landscape and policy developments will likely play a significant role in shaping Bitcoin’s future price trajectory.
