Bitcoin Range-Bound, Upside Limited

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The Bitcoin (BITCOMP) price briefly plunged to fresh mid-March lows around $38,500 at the start of the week before rebounding back above the $40,000 handle eventually. On Tuesday, the most popular digital currency has settled in a relatively tight trading range, struggling for direction around the $41,000 mark, strengthened by the 100-DMA. 

BTC recovered from a recent sell-off along with other cryptocurrencies but continues to face headwinds from both technical and macroeconomic developments. In particular, the bullish potential has been capped by rising bond yields, making potential buyers stay on the sidelines amid the rallying dollar. 

Also, digital assets stay risk-sensitive as well as traditional stock markets. Correlating with other riskier assets, bitcoin struggles amid an aggressive shift in monetary policy from the Fed as the central bank battles the elevated inflation. Meanwhile, worsening geopolitical developments in Ukraine add to nervousness among investors. 

In the immediate term, the BTCUSD pair needs to overcome the mentioned moving average in order to retarget the descending 20-DMA, today at $42,700. Should the coin fail to extend the rebound from five-week lows, the prices could get back below $40,000 in the days to come. 

On the positive side, dip buyers seem to stay alert beyond this psychological level, suggesting the downside could be limited at this stage. However, a bullish scenario looks unlikely as well for the time being, as the fundamental picture suggests risk-sensitive assets would stay vulnerable now, especially amid a combination of rising inflation and the emerging signs of a slowing growth. 

Elsewhere, the Ethereum price dipped below the $3,000 mark for the first time in nearly a month on Monday. Today, ETH bounced to notch six-day highs around $3,092. The second-largest cryptocurrency needs to overcome the $3,100 immediate barrier in order to preserve its bullish tone and see more robust gains in the coming days. As long as Ethereum trades below $3,300, the $3,000 mark stays in the market focus.