$40,000 Bitcoin is within reach, but analyst warns of possible series of near-term lows

There was no rest for weary crypto traders on March 10 as a 7.9% CPI headlined the day, weighing on global financial markets and erasing the previous day’s gains for Bitcoin (BTC), which fell to Under $40,000.

Data from Cointelegraph Markets Pro and TradingView showed that the BTC sell-off kicked off during early Thursday trading hours, with bitcoin hitting a low of $38,562 by midday before falling buyers pushed the price above $39,000.

Here's what analysts have to say about Bitcoin's price action and what levels to watch if you're bullish or bearish.

"Price Squeeze Before Volatility"

Insights into Bitcoin’s recent volatility were provided by crypto trader and anonymous Twitter user “Rekt Capital,” who posted the chart below, noting that “BTC remains between lower support in green and 50-week MA resistance in blue Make adjustments."

According to Rekt Capital, “Higher lows and lower highs are squeezing prices. Price squeezes precede volatility.”

As for how to resume the bullish narrative, Rekt Capital pointed to the green and blue exponential moving averages (EMAs), which have proven to be strong resistance levels over the past two weeks.

Rekt Capital says:

“To move higher in its macro range, BTC needs to reclaim two key bullish EMAs to confirm bullish momentum.”

BTC holders risk selling at a loss

Research fund Stack Funds discusses the nature of BTC price volatility in recent weeks, noting in its current weekly report that “Bitcoin has been choppy over the past few weeks, trading between $35,000 and $45,000 without a full strong directional kinetic energy.”

According to Stack Funds, recent price action has been "primarily news-driven," and analysts don't see any relief anytime soon as the Ukraine conflict and persistently rising inflation continue to pose significant headwinds.

Traders have shown little interest in increasing their exposure to current market conditions by looking at the Bitcoin Spend Output Profit Ratio (SOPR), a metric that represents the total profit and loss realized on a given date.

Stack Funds noted that the SOPR for long-term BTC holdings is “on track to reach the 1.0 threshold,” an important level because it marks the line between selling at a profit or selling at a loss.

According to the report, since Bitcoin’s price peaked in November 2021, the long-term holder SOPR has been on a downward trend and “is currently trading at around 1.5.”

In the two instances shown in the chart above, SOPR trended and fell below the 1.0 threshold in mid-2018 and late 2019, “Bitcoin traded sideways, falling further both times.”

Stack Funds says:

"Unless we see some positive catalyst in the market or a reversal in the SOPR indicator, we expect sideways and possibly lower price action, at least in the short term."

However, from the perspective of on-chain analysis, it is not all smooth sailing for Bitcoin price. In the chart below posted by crypto analyst and anonymous Twitter user “Plan C,” the analyst explains that “the number of Bitcoin accumulation addresses has been parabolic over the last month.”

"Plan C" defines accumulating addresses as "addresses that have had at least 2 non-dusting transfers and have never spent BTC funds."

Not bullish below $46K

As for Bitcoin’s near-term prospects, market analyst and Cointelegraph contributor Michaël van de Poppe noted that conditions below $46,000 do not look promising, and he believes that “a break below these lows is very likely.”

David Lifchitz, managing partner and chief investment officer at ExoAlpha, recently echoed these short-term bearish sentiments, noting that the recent surge in BTC “appeared suddenly, lasted less than an hour, and didn’t have much follow through.”

Lifchitz says:

“BTC is still stuck in the range of $33,000 to $45,000. If there is no follow-through in the next 48 hours, and there is no possibility of breaking through $45,000 to $50,000, BTC may continue to rebound in the range.”

The overall cryptocurrency market capitalization is currently $1.744 trillion, with Bitcoin dominance at 42.6%.