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- The Bitcoin bottom call at $79.5K appears to be holding.
- Market sentiment remains cautious despite bullish signals.
- The upcoming FOMC meeting may confirm or challenge the trend.
The call on Bitcoin price at $79.5K on March 11 has so far materialized. The market responded as projected five days ago. The price started reversing, with longs gaining strength as sellers lost momentum.
The market followed a well-known pattern in this cycle. Each drop of nearly 30% has been met with a recovery leg to the upside. This has occurred multiple times, adding to the likelihood of a prolonged uptrend. Despite this, many traders still maintain short positions.
A few retail whales have even entered big short wagers on exchanges with open visibility, convinced of lower prices. Quite surprisingly, a number of prominent traders predict Bitcoin will head to $87K and be rejected forcefully. This belief attracted more short positions, creating a liquidity buildup. That being said, price action shows that the market structure remains intact, and buyers are entering at significant levels.
FOMC Countdown and Bitcoin’s Bullish Signal
With the current candle open, the market is two 2-day bars away from the FOMC meeting. History shows that unless a new low is made within these bars, the bottom is sealed. In previous occurrences of the same setup, only 4 out of 12 occurrences saw a new low prior to an FOMC meeting.
This makes it 70% likely that Bitcoin will not revisit lower prices before moving higher. Secondly, Bitcoin has formed a bullish engulfing pattern on the 2-day chart. This is a powerful signal that requires big buy orders to sustain.
Unlike shorter timeframes, the 2-day chart filters out noise and false signals and is therefore an extremely handy tool. The major investors must show true commitment for this pattern to take place. Given the recent price action, even a 70% probability might be an understatement.
Bitcoin Disbelief Phase Unfolds
Despite the rebound, doubt among traders remains. Bitcoin’s price has followed a classic four-step procedure: the bottom, the rally, the deceleration, and the rise in shorts. This is an indication of entering the disbelief stage.
The Wall Street Cheat Sheet describes this phase as one where traders are still suspicious, having trouble believing that a turn has occurred. Most are still looking for confirmation, thinking that prices must go lower. But history shows that hesitation here quite often leads to opportunity loss.
With the FOMC meeting impending, market participants are preparing for volatility. The consensus view is for a rejection at higher levels, yet the structure suggests growing strength. If Bitcoin is to persist in its pattern, the uptrend might surprise those who are still anticipating lower prices. The next several days can be key in confirming whether the bottom is fully in place or whether there is yet another shakeout.
Related Reading: Bitcoin Price Fluctuations: Could Over-Optimism Signal a Pullback Soon?
