Key Takeaways
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Bitcoin plunged below $90,000 to a three-month low on Tuesday, continuing a slide from its record high set last month, as economic uncertainty weighs on investor sentiment.
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The cryptocurrency broke down below the neckline of a double top pattern on above-average volume in Tuesday's trading session to confirm the formation.
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Investors should watch crucial support levels on bitcoin's chart around $80,400 and $74,000, while also monitoring key resistance levels near $98,500 and $106,000.
Bitcoin (BTCUSD) plunged below $90,000 today, continuing a slide from its record high set last month, as economic uncertainty weighs on investor sentiment.
Bitcoin’s price, which fell below $86,000 earlier in the day before recovering back around $89,000 recently, came under pressure from news that the Trump administration’s tariffs on Mexico and Canada will go ahead as planned. Investors typically view tariffs as inflationary, which could scuttle possible interest rate cuts this year, a move that would weigh on non-yielding risk-on assets like bitcoin.
Looking ahead, March is historically a mixed month for Bitcoin, with the cryptocurrency having logged an even amount of positive and negative returns for the month between 2013 and last year, according to data from crypto analytics site Coinglass. Bitcoin has slipped 5% since the start of the year, but is still up about 25% since the U.S. presidential election, amid hopes that the Trump White House and a crypto-supportive Congress will adopt policies that support the asset class.
Below, we take a closer look at bitcoin’s chart and use technical analysis to identify crucial price levels worth watching out for.
Double Top Neckline Breakdown
Since forming two distinct peaks between December and January, bitcoin’s price has continued to trend lower, creating a textbook double top pattern in the process. Moreover, a decisive breakdown below the neckline on above-average volume in Tuesday’s trading session confirms the formation.
It’s also worth pointing out that as the cryptocurrency made a slightly higher high last month, the relative strength index (RSI) forged a comparatively shallower peak to signal a bearish divergence, a technical occurrence indicating weakening price momentum.
However, recent selling has also pushed the RSI indicator into oversold territory, raising the possibility of near-term upswings.
Let’s identify several crucial support and resistance levels on bitcoin’s chart that investors may be watching.
Crucial Support Levels to Watch
Further selling below the double top’s neckline could initially see a move down to the $80,400 level. This area on the chart may provide support near the 200-day moving average (MA) and the closing and opening prices of two key bars that formed during an impulsive move higher in mid-November.