Bitcoin (BTC) Struggles to Break Past $84,000 Resistance, Stuck in a $5,500 Range

Bitcoin (BTC) is trading within a $5,500 range, struggling to break past $84,000 resistance.

Bitcoin (BTC) has been struggling to break past the $84,000 resistance and is now trading within a $5,500 range as macroeconomic uncertainty and Trump’s trade policies continue to dampen risk asset demand, new data from Glassnode and CoinsGlass shows.

Bitcoin price remains stagnant amid macro pressures and technical resistance.

As of March 9, Bitcoin’s price has been consolidating between $78,599 and $84,000, according to Glassnode. This marks nearly three weeks of flat trading, which could be attributed to the increasing economic and geopolitical concerns that have been limiting Bitcoin’s upside momentum.

The narrative of the Biden-Trump trade war has returned, with the potential tariffs on Mexico and Canada having an impact on investor sentiment.

Moreover, global markets are still on edge due to inflation risks and the threat of retaliation from trading partners. Historically, Bitcoin has been a preferred asset class during periods of economic turmoil as traders seek out hard-to-counterfeit assets. However, the current macroeconomic headwinds have been decreasing risk appetite, especially for cryptocurrencies.

Coin heating up: Is BTC funding rate a good indicator of market sentiment?

Bitcoin demand seen waning

Another interesting observation from Glassnode’s data is the decreasing activity in the short-term holder (1w-1m) cost basis. This suggests that traders holding coins for less than a month have been reducing their exposure to Bitcoin.

As of March 9, the 1w-1m cost basis stands at $76,400, while the 1m-3m cost basis is at $78,000. This indicates that there has been a net outflow of capital from this time frame.

The chart above shows the decreasing activity in the 1w-1m cost basis, which signifies a reduction in short-term holder exposure.

Earlier, crypto analytics firm Glassnode noted that the 1w-1m cost basis had been rapidly increasing during Bitcoin’s rally from the $48,000 low in November 2022. This rapid buildup signaled a strong influx of capital from new buyers, who were aggressively accumulating BTC in the lower price ranges.

However, the rate of change in the 1w-1m cost basis has now reversed, indicating that macro uncertainty has dampened demand, slowing down new inflows into the market.

The crypto analytics firm further stated that this suggests new buyers are now unable to absorb the sell-side pressure, ultimately shifting the market environment from post-ATH euphoria into a more cautious stage.

Bitcoin futures funding rates remain neutral

Another indicator of Bitcoin’s stagnation is the neutral funding rates on perpetual futures contracts. According to CoinsGlass, funding rates across major exchanges like Binance, OKEx, and FTX are still hovering close to the 0% mark.

The chart above shows the funding rates on Binance, OKEx, and FTX for Bitcoin perpetual futures contracts.

A positive funding rate indicates that traders are bullish and willing to pay a premium to keep their positions open, while a negative funding rate signals bearish sentiment. However, both extremes can also lead to increased liquidation risk.

In the case of Bitcoin, the funding rates have remained largely neutral over the past few weeks, which could signify that neither bulls nor bears have a clear upper hand.

Without strong speculative activity from either side, it becomes more difficult for Bitcoin to sustain a breakout from its current consolidation phase.

What does technical analysis say?

Bitcoin is currently facing strong technical resistance at key moving averages (MAs) as it tries to breakout from the $78,599-$84,000 range. On March 9, BTC fell below the 200-day simple moving average (SMA) at $83,736.

The 200-day SMA has since rejected Bitcoin’s breakout attempts, keeping BTC within its current range. Another key technical indicator to watch is the 200-day exponential moving average (EMA), which is currently at $86,000.

According to crypto analyst Daan Crypto Trades, these indicators are crucial for determining the mid-to-long-term trend and overall market strength.

Without a decisive close above them, Bitcoin could remain range-bound for an extended period as traders await further signals.