Bitcoin price recovered modestly from its monthly lows, but struggled to cross the important resistance at $85,000.
Bitcoin (BTC) rose to $84,525 on Saturday, up 10% from its lowest level this month. It remains in a local bear market after falling by over 22% from its highest level this year.
At the time of publication, it was trading at just over $84,335.
Bitcoin and other altcoins rose slightly on Friday, mirroring the performance of other assets like stocks and gold. The Dow Jones index rose by over 650 points, while the S&P 500 and Nasdaq 100 jumped by 117 and 450 points, respectively. Gold jumped to a record high of $3,010.
Bitcoin price faces potential risks
Bitcoin’s recovery faces two potential risks and two opportunities. First, there are signs that investors are still in a sense of fear. While the fear and greed index has exited the extreme fear zone of 18, there are signs that investors are still fearful. It remains in the fear zone of 22.
Historically, Bitcoin and other cryptocurrencies do well when the index is in the greedy zone. This fear explains why spot Bitcoin ETFs shed $143 million in assets, bringing the weekly outflows to $870 million. They had outflows in the last five consecutive weeks.
Second, technically, Bitcoin has formed a death cross as the 50-day and 200-day Weighted Moving Averages crossed each other. This crossover often leads to more downside over time. In Bitcoin’s case, there is still room to retest $73,900, the highest level in March 2024.
BTC price chart | Source: crypto.news
Bitcoin price potential opportunities
For Bitcoin’s first opportunity, investors would be wise to see what the Federal Reserve reports after it holds its second meeting of the year on March 18-19. Recession fears may inspire the central bank to embrace a dovish tone and hint at more interest rate cuts.
A change of tune by the Federal Reserve would be a positive thing for Bitcoin, altcoins, and other altcoins.
The other opportunity is that investors may embrace a risk-on sentiment and buy the dip in the stock and crypto market. That’s because the most extreme risks of tariffs have now been priced in as the stock market shed trillions in value.
This performance has happened before, such as during the COVID-19 pandemic. Investors panicked and sold stocks and crypto in March 2020 and then bought the dip as the Fed embraced a highly dovish sentiment.
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