Bitcoin Declined to the Key Support Level
It was a tough day for Bitcoin, as its price fell to the key $44,000-$45,000 support level on the last of February for the third time in the past week. Interestingly, the BTC/USD pair briefly dipped below $44,000 on Bitstamp before pairing some of the losses.
According to some analysts, an uptick in miners’ selling caused this situation. Hopefully, the third retest of this key support level may have a silver lining for the bulls. Interestingly, the daily Bitcoin Spent Output Profit Ration (SOPR) experienced a “full reset”. As a reminder, the SOPR shows whether spent outputs are in profit or loss at the time of transaction. People should keep in mind that, SOPR turned negative for the first time since September 2020.
Importantly, the SOPR crash is a potentially bullish turnaround for BTC price in combination with last week’s reset of derivatives funding rates because such events in the past coincided with the start of new uptrends.
Bitcoin and important factors
It is worth noting that, the last time the SOPR flipped green was five months ago when Bitcoin was trading around $10,000. As a reminder, it was a key hurdle for BTC to trigger a new bull market. Since then, the price jumped more than five folds to new all-time highs of around $58,000.
However, many traders remain cautious as the market enters the month of March. This month has historically been bearish for cryptocurrencies, and all markets in general.
There is a chance that March may be slow with a lack of confidence in traditional markets. However, Bitcoin has the potential to strengthen its position over the next three months.
At the same time, Bitcoin traders are keeping a close eye on the $44,000-$45,000 level. Interestingly, the $45,000 level provides very strong support.
People should keep in mind that, the entire cryptocurrency market now depends on the world’s largest cryptocurrency holding above this key level.
Bitcoin is the world’s largest cryptocurrency and it is not surprising that traders are closely monitoring the situation. As a reminder, cryptocurrencies gained popularity all over the world. People are willing to pay thousands of dollars to buy this cryptocurrency. Moreover, authorities should cooperate with companies as well as analysts to make cryptocurrencies more popular around the globe. It won’t be easy to overcome all challenges in a short period of time. Nevertheless, cryptocurrencies have the potential to solve many problems.