Bitcoin Market Overview

Bitcoin (BTC) is currently trading in bear territory following a sharp correction, yet it remains in a bull market after reaching a record high of $108,000 in late January.

Key technical indicators suggest that this recent pullback may represent one of the most attractive buying opportunities in months. Bitcoin’s 50-week moving average (MA) serves as crucial support, sustaining the broader bullish trend. Additionally, the 0.5 Fibonacci retracement level shows significant strength, anchoring Bitcoin firmly within bull cycle territory according to TradingShot.

Bitcoin’s 0.5 Fibonacci ‘Golden Rule’ Maintained

Historically, Bitcoin corrections to the 0.5 Fibonacci retracement level have indicated healthy, systemic pullbacks instead of bearish market entries. Every correction that respected this level, particularly when combined with the 50-week MA support, has typically been followed by strong rallies. Since the August 2015 bear cycle bottom, instances where Bitcoin fell below the 0.5 Fib level have often marked deep bear markets, such as in 2018 and 2022.

Despite the recent sharp correction affecting short-term sentiment, the underlying technical structure suggests this pullback signals another systemic correction rather than a bear-market warning. As long as Bitcoin does not decisively close below both the 50-week MA and the 0.5 Fibonacci level, the broader bull cycle is considered intact.

The current setup resembles the August 2024 low, which provided an excellent entry point for long-term investors.

Diverging Views: Caution from CryptoQuant

Not all analysts share this optimism. CryptoQuant CEO Ki Young Ju has issued a more cautious outlook, suggesting that Bitcoin’s bull cycle may already be over. Ju pointed to several on-chain metrics indicating the beginning of a bear market, noting that fresh liquidity is drying up and new whales are offloading Bitcoin at lower price levels.

Moreover, ETF inflows have been negative for three consecutive weeks, further dampening investor sentiment. This bearish trend has affected cryptocurrency exchange-traded products (ETPs) too. According to a March 17 report by CoinShares, crypto ETPs experienced outflows totaling $1.7 billion last week, the fifth consecutive week of withdrawals. Particularly, Bitcoin products accounted for $978 million in outflows last week alone, leading to a total of $5.4 billion in Bitcoin outflows over the last five weeks.

Despite prevailing bearish sentiment, Bitcoin’s ability to remain above its key technical levels offers optimism. The market’s trajectory in the upcoming weeks will depend on Bitcoin’s behavior around these crucial supports.

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