Bitcoin March 2025 Price Analysis Update

There's been a ton of volatility surrounding Bitcoin's price as of recent, so we're going to check that out and see what's really going on. I assume that this price analysis is coming at a good time for most since there appears to be peak confusion in the minds of traders currently at the time of writing.

Confirming the Double Top Formation

Over the past few days and weeks, multiple traders in the crypto space have identified a double top formation on Bitcoin's chart (daily resolution). A careful analysis confirms this observation, which carries significant implications for Bitcoin's price trajectory.

Let's take a look at the main chart to understand why this double top formation has materialized on the daily resolution (which indeed suggests potential bearish movement ahead).

As we can see in the chart above, Bitcoin's price has clearly formed two nearly equivalent localized highs over the past few weeks - a classic double top pattern.

Specifically, the first 'top' occurred on December 18th, 2024 and the second 'top' was on January 22nd, 2025

This double top formation is particularly noteworthy because it meets the key criteria for this pattern. To understand why this is significant, let's review the technical definition of a double top chart formation.

Understanding the Double Top Formation

Per Investopedia, a double top, "is an extremely bearish technical reversal pattern that forms after an asset reaches a high price two consecutive times with a moderate decline between the two highs. It is confirmed once the asset's price falls below a support level equal to the low between the two prior highs."

Per Stockcharts, "After the first peak, there is generally a 10-20% decline. Volume on the decline is inconsequential. The lows are sometimes rounded or drawn out a bit, which can signify tepid demand."

Taking a closer look at the charts, we can confirm that there was a -10 to 20% decline in the price from the first localized top it made to the 'trough' (that support point that the price bounces from before re-testing that same high and getting rejected the second time around).

See below:

As the chart above reflects, the price depreciated -13.09% to test the $93k as a support before returning for a second test of the previous high that had been notched ($106-108k).

Referring back to Stockcharts, the site tells us that, "The subsequent decline from the second peak should witness an expansion in volume and/or an accelerated descent, perhaps marked by a gap or two. Such a decline shows that demand forces are weaker than supply, and a support test is imminent."

More specifically, "The Even after trading down to support, the Double Top Reversal and trend reversal are still incomplete. Breaking support from the lowest point between the peaks completes the Double Top Reversal. This should occur with increased volume and/or accelerated descent."

Let's take a look at our chart again to see whether Bitcoin's price action broke below the support that was tested after the pushback from the first high that was created. If so, then the impact of the Double Top formation is complete (i.e., we can consider the net bearish impact to be wherever the price lands after it breaks south of the support that was formed prior).

Taking a closer look, we can see the price depreciated another -9% once it fell below the support that was created after the push back from the first localized high that was created for this double top formation.

The support that was tested and established when the price fell below the support for this double top chart formation (on the daily resolution), is $87k.

From that point forward, the price made a swift recovery before re-testing that former support as an overhead resistance. When this occurred, the price was successfully pushed back, finalizing all features and traits of a double top chart pattern.

Now the question we have from this point is 'what to expect next?'.

To find out the answer to that, we're going to employ a wide host of custom indicators and tools to help facilitate our reading of Bitcoin's price action via technical analysis. This analysis tends to be extremely accurate (this is verifiable for anyone that elects to look at prior price analyses that have been published on Twitter, Discord, Telegram, TradingView and elsewhere over time).

EMA Indicators Underscore Recent Bearish Price Action

Since EMA indicators are lookback indicators, they aren't necessarily meant to forecast future price action off the strength of these readings (have to be careful to remain aware of this).

If we look at Bitcoin's price action on the daily resolution, we'll see that the EMA-12, EMA-26, EMA-50, EMA-100 and EMA-200 are all at values that are above where Bitcoin is trading at, at the time of writing during this period (daily candle; March 5th, 2025 UTC).

To get a better idea for what I mean, see below:

Above we can see the EMA-12's value is $89,549 while Bitcoin is currently trading at $87,400.

Above, we can see that the EMA-26's value is at $92,548 while Bitcoin is currently trading at $87,400

Above, we can see that the EMA-50's value is at $94,585 while Bitcoin is currently trading at $87,400.

Above, we can see that the EMA-100's value is at $93,028 while Bitcoin is trading at $87,520.

Here, in our only deviation from the pattern established by the other EMA indicators, we can see that Bitcoin is currently trading above the notional value of the EMA-200 on the daily resolution. Specifically, the EMA-200's current value is $85,740 while the price of Bitcoin is still hovering at $87.513 at the time of writing.

Everything we wrote above means a few things. Specifically:

1. Since the EMA-200's value is below where the price is at currently at the time of writing, that's going to serve as another market of support (the value of the EMA's on the daily always serve as either support or resistance points contingent on whether they are above or below the price at that point in time).

2. Following from what we wrote in #1, we can deduce that all of the other EMA values will serve as various overhead resistance points. Among all of them, the strongest resistance will be posed by the EMA-50. Why? Not entirely sure, to be honest. I can just tell you from observation after charting Bitcoin for nearly 10+ years, that the EMA-50 tends to have the strongest impact on price action, whether as an impediment (via overhead resistance) or immobile support (via underlying support).

3. The EMA-50 is still well above the EMA-100 and EMA-200. This means that we're nowhere near double cross territory. That's good, because that would reflect a higher level of bearishness than we'd wanna see (if we're bull market advocates).

With all of that being said, many of the other indicators for Bitcoin on the daily resolution provide a very bullish reflection. Let's take a look at some of those indicators for a second to get a greater feel for where Bitcoin is headed in the not so distant future.

Librehash Reversion Ribbon V2

If we take a look at the Reversion Ribbon (custom indicator) we can see that there was a very faint bullish signal on Bitcoin that appeared recently. But what we can see on the chart from this indicator, currently, is not enough for us to justify entering into a bullish position yet (or a bearish one either).

Check it out below:

As we can see from the chart above:

• The ribbon is currently below the histogram (zero point), which belies bearish price action.

• The ribbon did exhibit a bullish cross over recently (changing the color of the ribbon from red to green). That occurred between March 1st and March 2nd. However, as we can see the bullish divergence that emerged was very short lived.

• Moving forward, we can see that the ribbon has begun converging just one period after it made its bullish crossover with some sizable divergence behind it.

As of right now, there's not really enough information that we can glean from the indicator to say that its forecasting bullish or bearish price action in the near future. However, one thing that we can say is that observation tells us that there's been a ton of bearish price action over the past 2-3 periods.

Specifically, we can see that the green candles are only colored light green (this indicator changes the shade of the candle based on the strength of the underlying price action [i.e., very bullish = green; very bearish = red]). In addition, for those two large daily candles that formed on March 2nd and March 3rd, both were given red outlines. This is essentially our indicator telling us that despite the bullish price action, there was strong underlying bearish sentiment.

Take a closer look below here:

So, thus far, we can say that the Reversion Ribbon v2 isn't dictating any particularly bullish price action.

Let's take a loot at some of our other indicators here (and also speed up this analysis so that we can get to the point a bit quicker as there are other things that we have to get done right now at the time of writing).

Reading the Rest of Our Indicators

We'll start with some of our oscillators to get a better idea of how to forecast Bitcoin's price action in the not so distant future.

Above we can see the Cryptomedication Volatility RSI. Based on how the indicator is meant to be evaluated and read.

Its worth noting the following with this indicator:

1. Volatility Level: The indicator appears to be at a relatively low level, suggesting decreased volatility in Bitcoin's price action currently. As explained in the definition, "as the line nears the bottom, so does volatility."

2. Price Contraction: Since this indicator tracks both expansion/contraction in price and increase/decrease in volatility simultaneously, the current position suggests we're in a period of price contraction.

3. Trend Indication: The Volatility RSI's current trajectory can help identify potential entry/exit points. The relatively low reading suggests we may be approaching a period where a new trend could emerge.

Our Trade Strategy

We have a two pronged strategy that is designed to 'go with the flow' of future price action for Bitcoin.

Bitcoin is currently at a critical juncture following a confirmed double top formation with peaks at $106-108k. Price has broken below the $93k support level and is currently trading at $87,400, positioned between multiple EMA resistances above and the EMA-200 support below. Technical indicators suggest decreased volatility and potential for a new directional move in the near term.

Trading Strategy: Dual Scenario Approach

Scenario 1: Bearish Continuation (Primary Scenario)

Entry Conditions:

• Current price level ($87,400) or on rejection from EMA-12 resistance ($89,583)

• Confirmation: Daily close below $87,000

• Additional validation: Failure of price to reclaim EMA-12 on a retest

Position Management:

• Stop Loss: $89,600 (just above EMA-12)

• Risk per trade: 2.5% of trading capital

• Target 1: $82,000 (25% of position) - R/R ratio: 2.7:1

• Target 2: $78,500 (50% of position) - R/R ratio: 4.5:1

• Target 3: $76,000 (25% of position) - R/R ratio: 5.8:1

Technical Rationale:

• Complete double top formation with break below crucial $93k support

• Price trading below four major EMAs (12, 26, 50, 100)

• Reversion Ribbon below zero with bearish candle coloring

• Recent failed retest of $93k as resistance

• Measured move from double top projects lower prices

Risk Invalidation:

• Daily close above $89,600 (EMA-12)

• Significant increase in Volatility RSI with bullish price action

Scenario 2: Bullish Reversal (Alternative Scenario)

Entry Conditions:

• Price breaks and closes above EMA-12 ($89,583)

• Confirmation: Successful retest of EMA-12 as support

• Additional validation: Volatility RSI showing expansion from low levels

Position Management:

• Entry: $89,700 (after confirmation)

• Stop Loss: $85,700 (just below EMA-200)

• Risk per trade: 2% of trading capital

• Target 1: $92,500 (EMA-26) - 50% of position - R/R ratio: 0.7:1

• Target 2: $94,600 (EMA-50) - 30% of position - R/R ratio: 1.2:1

• Target 3: $98,000 (psychological level) - 20% of position - R/R ratio: 2.1:1

Technical Rationale:

• Price holding above critical EMA-200 support

• No "double cross" in EMAs (EMA-50 still above EMA-100/200)

• Low volatility period (per Volatility RSI) often precedes significant moves

• Potential for contrarian move against obvious bearish pattern

Risk Invalidation:

• Daily close below EMA-200 ($85,740)

• Acceleration of bearish momentum on high volume

Key Price Levels to Monitor

Support Levels:

• $87,000 (Current established support)

• $85,740 (EMA-200) - CRITICAL

• $82,000 (Projected target based on pattern measurement)

• $78,500 (Psychological support near $80,000)

Resistance Levels:

• $89,583 (EMA-12) - IMMEDIATE

• $92,548 (EMA-26)

• $93,000 (Former support, now resistance)

• $94,604 (EMA-50) - STRONG