After a week of sharp declines, Bitcoin's technical outlook is unclear, and an important day is coming

Last week, Bitcoin plunged 20%, falling below the $10,000 mark and now hovering around $9,000. The short-term outlook remains unclear and even a bit weak.

Let’s look at the technical side first. CNBC quoted Frank Cappelleri, executive manager of Nomura Instinet’s institutional equities business at Nomura Holdings, as saying:

Looking at the slightly longer term, Bitcoin is now below a key trendline (which is being tested upwards). The last time this support line was tested, investors rushed to buy. If the situation is not repeated soon this time, it is hard to say whether it will fall back to the February lows.

According to data from the CoinDesk platform, Bitcoin fell to as low as $5,947.4 last month. It hit $8,370.8 last Friday, the lowest level since February 13.

Last week, Bitcoin was under a lot of pressure from regulators. Wall Street News mentioned that last Wednesday, the US Securities and Exchange Commission stated that digital asset trading platforms may be illegal; last Thursday, the Japanese Financial Services Agency punished several cryptocurrency exchanges; and last Friday, Zhou Xiaochuan, governor of the People's Bank of China, said that Bitcoin and forked products were expanding too fast and not cautiously enough, and that dynamic regulation would be implemented in the future.

In the short term, there is nothing good about the news. On the contrary, it may make a risky asset like Bitcoin even riskier - a four-month Bitcoin futures contract of CBOE (Chicago Board Options Exchange) is about to expire.

The official website shows that the main CBOE Bitcoin futures contract XBT/H8 will end trading at 2:45 p.m. Chicago time on March 14 (3:45 a.m. Beijing time on March 15). Last week, the contract fluctuated between $8,380 and $11,710, with a fluctuation range of 28.4%.

While there are many factors driving the price higher, Bitcoin could see some notable volatility this week, especially as the expiration date approaches on Wednesday.

CBOE Bitcoin futures are settled in cash. If investors do not clear their positions within the prescribed time, they may suffer losses if Bitcoin continues to fluctuate sharply. You can look at the price changes in the past two days:

The CFTC (U.S. Commodity Futures Trading Commission) position report shows that the speculative net short position of CBOE Bitcoin futures dropped significantly to 1,599 lots last week, compared with 1,833 lots the previous week. JC Parets, founder and president of All Star Charts, said that Bitcoin is now "stuck" between $7,400 and $11,900.

I don’t want to buy low, I want to wait for it to go up. In other words, if the price doesn’t break through $11,900, don’t touch it.

Chris Kimble, founder and CEO of Kimble Charting Solutions, believes that Bitcoin is now in a converging pennant pattern, which does not represent a clear direction. But he also said that this technical pattern "does mean that there will be big price changes ahead."