An agitated week for bitcoin

Starting the 8th week of 2021, Bitcoin had a correction, and it creates a panic wave, capturing the spotlights and getting mainstream. On Monday the 22nd of February, the correction shaved as much as 17% off BTC’s price before recovering, however, the trend continued Tuesday, reaching a 20% drop in two days.

Some media claimed that it was the largest one-day drop in history, a comment that is somewhat misleading to the general public. Bitcoin has recorded larger single-day declines in the past. For instance, December 22nd, 2017, and most recently last year, on March 12th, registering an even more significant fall of an astonishing 42%.

Now, reading the price action, last month’s correction was around 30%, and I don’t recall the pullback getting as much attention.

Technically speaking, the market remains controlled by the buyers’ side. The price has managed to close above the 20 EMA for bulls confirmation. It also is interesting to notice that Monday’s correction tested the golden Fibonacci level at 618 supporting an uptrend bias, and finally, RSI is not showing overextension but is just hovering in no man’s land. This is not a sign of a market reversal, at least not yet.

Please keep in mind that markets need to take a break. Corrections are generally healthy, and exhausted bulls need to rest and regroup before they can regain control of the board.

Manage your risk when investing, do not forget that the market is always right.

Chart Timeframe: Daily

Technical Indicators: EMA, FIB Retracement, RSI

Source: https://www.tradingview.com/x/5pEswFWL/

Oliver Garcia

Senior Market Analyst
ogarcia@tvmarkets.com