Biggest Red Weekly Candle Ever: 5 Shocking Bitcoin Market Insights

Bitcoin (BTC) has just witnessed a market event that has sent ripples of unease through the crypto sphere – the biggest red weekly candle in its history against the US dollar. As the second week of March begins, the burning question on every trader’s mind is: how low can Bitcoin really go? With multimonth lows looming and traditional markets showing risk-off behavior, understanding the current landscape is crucial. Let’s dive into the 5 shocking things to know in Bitcoin this week, cutting through the noise to give you actionable insights.

1. Record-Breaking Bitcoin Price Drop: The Biggest Red Weekly Candle

Last week was nothing short of a bloodbath for Bitcoin. The numbers don’t lie – BTC/USD experienced its most significant value shed in a single week ever. Dropping to the $80,000 mark as the weekly candle closed, this historic Bitcoin price drop has understandably rattled many investors. Data from Crypto News Insights Markets Pro and TradingView paints a clear picture of this unprecedented downturn.

While bulls are desperately trying to prevent a fall to February’s multimonth lows, caution is the prevailing sentiment among even seasoned Bitcoin traders.

2. Critical Support Levels and Market Analysis: Will Bitcoin Revisit $78,000?

Analysts are closely watching key support levels. Kevin Svenson points out that Bitcoin is teetering on the edge of a critical weekly parabolic trend. He emphasizes that holding current lows is Bitcoin’s “last chance to maintain an exponential higher low.”

SuperBro echoes this sentiment, anticipating a potential revisit to the $78,000 level. He notes the break from the uptrend since October 2023, suggesting that such a significant candle often signals further downward movement. While some traders spot bullish divergences on lower timeframes, the overall expectation leans towards testing lower levels.

CrypNuevo, while not declaring a bear market just yet, also highlights the importance of the $77,000 area, noting significant liquidation levels around this price point.

3. CPI and PPI Data: Macroeconomic Jitters Fueling Crypto Sentiment

This week’s macroeconomic calendar is packed with crucial US data releases, most notably the Consumer Price Index (CPI) and Producer Price Index (PPI) for February. Remember last month? Both CPI and PPI exceeded expectations, triggering inflation concerns that shook market confidence. Since then, neither crypto nor traditional stocks have managed a robust recovery.

With the Federal Reserve’s next interest rate decision looming next week, optimism is scarce. The CME Group’s FedWatch Tool currently indicates a mere 3% probability of a rate cut in March. Rate cut expectations for the May meeting are also diminishing rapidly.

The Kobeissi Letter highlights crashing economic growth expectations, with the Atlanta Fed even reducing their Q1 2025 GDP growth estimate to a concerning -2.8%. This economic uncertainty is a significant driver behind the current “risk-off” environment and the negative crypto sentiment.

4. Bitcoin’s Floor? Back to 2021 All-Time Highs?

Where will Bitcoin bottom out? The question is nerve-wracking for bulls. As $80,000 support hangs precariously, some forecasting tools point to a potential floor at Bitcoin’s old 2021 all-time high. Timothy Peterson’s Lowest Price Forward tool, which accurately predicted Bitcoin would not fall below $10,000 post-September 2020, now suggests a new line in the sand around $69,000.

Peterson clarifies that his tool doesn’t predict where Bitcoin will go, but rather where it is unlikely to fall below. He estimates a 95% probability that Bitcoin will not breach $69,000.

Adding to this, calls for a drop to the mid-$70,000 range are gaining traction. Bitcoin’s 50-week simple moving average (SMA) at $75,560 is being eyed as a key target. The 200-day SMA, a traditional bull market support, failed to hold for the first time since last October.

Arthur Hayes, former BitMEX CEO, anticipates a retest of $78,000 and potentially $75,000 if that level breaks, citing significant options open interest in the $70,000-$75,000 range which could trigger violent price action.

5. Contrarian Signals: Whale Accumulation Amidst Extreme Fear

Despite the prevailing bearishness and extreme crypto sentiment reflected in the Crypto Fear & Greed Index (currently in “extreme fear” territory, mirroring levels seen during major market bottoms), there are contrarian signals emerging. Santiment reports significant Bitcoin whale and “shark” accumulation. Entities holding 10 BTC or more have been increasing their holdings since March 3rd, adding nearly 5,000 BTC to their collective wallets.

While this accumulation hasn’t yet translated to positive price action, Santiment suggests a potential delayed positive response. If this whale buying continues, the second half of March could see a surprising relief rally, contrasting sharply with the recent “bloodbath.”

Adding to the contrarian view, Barchart notes that stock market sentiment is also extremely bearish, reaching levels rarely seen this century, comparable to the bottoms of the Global Financial Crisis and the COVID crash. Historically, such extreme bearish sentiment has preceded significant market rallies.

Anthony Pompliano advises against being swayed by sentiment indices, pointing out the disconnect between the Fear & Greed Index and actual Bitcoin price movements over the past year.

Navigating the Red Candle Aftermath: Key Takeaways

• Historic Drop: Bitcoin just experienced its biggest red weekly candle ever, signaling significant selling pressure.
• Key Levels to Watch: $78,000, $77,000, and potentially $69,000 are critical price levels to monitor for potential support or further declines.
• Macroeconomic Influence: CPI and PPI data this week will heavily influence market sentiment and Bitcoin’s price action.
• Whale Accumulation: Despite bearish sentiment, large Bitcoin holders are accumulating, potentially signaling a future price rebound.
• Extreme Fear as Opportunity?: Historically, extreme fear in both crypto and traditional markets has sometimes preceded significant buying opportunities.

This week in Bitcoin promises to be volatile and pivotal. Keep a close eye on the macroeconomic data releases, monitor whale activity, and stay informed as the market seeks to find its footing after this unprecedented red weekly candle. Remember, in the world of crypto, volatility is the name of the game, and understanding these market dynamics is your greatest advantage.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Trading and investing in cryptocurrencies involve significant risk. Conduct your own research and consult with a financial advisor before making any investment decisions.