Bitcoin Drops 11% This Week, Rebounding After Hitting 365-Day MA

Bitcoin's price movements have been under intense scrutiny as traders and analysts monitor key levels that could determine its next significant move. According to on-chain data provider CryptoQuant, if Bitcoin continues its upward trajectory, the $84,000 and $96,000 levels are crucial to observe. These levels have previously acted as significant support points during this cycle, but there is a growing concern that they could flip into resistance if market momentum wanes.

Bitcoin experienced a notable drop this week, falling from $83,583 to $74,553 on Wednesday, marking a five-month low. However, prices recovered most of their losses by April 9. Technically, Bitcoin's price rebounded after hitting its 365-day moving average (MA), which has historically served as a significant support level. CryptoQuant noted that Bitcoin found support near its 365-day MA at $76,100, a level that has been crucial in previous market cycles. A sustained drop below this MA could signal the start of a bear market.

At the time of reporting, Bitcoin had risen 0.8% in the previous 24 hours to $82,160. If the price continues to rise, it may encounter resistance at $84,000, followed by $96,000. These levels define the lower band of the Trader’s Realized Price and have served as price support during this bull cycle. However, they may now act as resistance if bullish conditions do not improve, as seen in previous bearish cycles.

On the other hand, if declines persist, Bitcoin may retest key support levels. According to Glassnode’s Cost Basis Distribution, Bitcoin has built notable support at $79,000, with about 40,000 BTC accumulated there. BTC has also worked through the $82,080 cluster, where 51,000 BTC are positioned. If this level holds, the next challenge will be $83,500, where 48,500 BTC are located.

Bitcoin's recent price action has been characterized by significant volatility, with the cryptocurrency dropping from its record high of nearly $110,000 in January to below the $78,000 mark. This downturn has been linked to the implementation of broad global tariffs, which have shaken investor confidence and impacted both traditional and crypto markets. Despite initial optimism, recent policies have dampened the enthusiasm in the crypto space.

Bitcoin, often seen as a hedge against traditional finance and a speculative asset sensitive to liquidity flows, is now at a critical juncture. Analyzing the monthly chart provides a clearer picture of the market's overall direction by reducing short-term noise. From the lows of November 2022 to the highs reached in January, Bitcoin surged by an impressive 611%. The current structure, forming since the 2022 bottom, shows that the market has consistently maintained a higher low trend relative to previous swing lows. Bitcoin is currently trading at $80,200, a crucial level to hold as it represents the 50% retracement of $79,500 from the previous swing low to the all-time high, serving as a natural support level where demand is expected to be strong.

Zooming in to the weekly timeframe, more detail regarding the structure that formed the monthly swings becomes apparent. As of the current price action, BTC is holding well above the 50 EMA, which aligns with the 50% retracement level of the overall trading range. This alignment suggests that the current price level is a critical support zone, and a break below this level could signal further downside potential. Traders and investors are closely watching these levels, as they could provide valuable insights into the next major move for Bitcoin in the days and weeks ahead. The ability of Bitcoin to hold above these key support levels will be crucial in determining its short-term trajectory and overall market sentiment.