While bitcoin can suffer deeper drawdowns because of traditional market instability, its broader bullish trend would remain valid as long as historically strong chart support is held intact.

"The 21-week SMA (Simple Moving Average) is the level to defend for the bulls," trader and technical analyst Michaël van de Poppe told CoinDesk. "The bias remains bullish as long as the SMA support is intact."

An SMA is an arithmetic moving average calculated by adding recent prices and dividing the tally by the number of periods. SMAs are trend-following, lagging indicators and often act as support and resistance levels.

The 21-week SMA acted as a price floor during the previous bull market, as seen below.

The cryptocurrency repeatedly found dip demand (marked by arrows) around the 21-week SMA throughout the rally from $300 to $19,783 seen in the October 2015-December 2017 period.

If history is a guide, deeper pullbacks, if any, could run out of steam around the 21-week SMA this year. The technical line is now located at $32,240, while bitcoin is changing hands near $46,500.

A continued rise in the U.S. Treasury yields could push the dollar higher, sending bitcoin toward the SMA support.

One cannot rule out that possibility as Federal Reserve Chairman Jerome Powell defied expectations on Thursday by expressing little concern regarding the recent spike in yields. That has left the doors open for a further rally in yields and an extension of last week's risk aversion trades.

The dollar strengthened, while bitcoin and stocks fell in the seven days to Feb. 28, as the U.S. 10-year Treasury yield surged to a 12-month high of 1.6% and investors priced in higher odds of an early unwinding of the Federal Reserve's stimulus.

The yield remains elevated near 1.6% at press time, and the dollar index is hovering at a three-month high of 92.00. Also, European stocks and the U.S. stock futures are flashing red.

Both bitcoin and stocks may find some relief later Friday if the U.S. nonfarm payrolls data due at 13:30 UTC paints a gloomy picture of the labor market and sends yields lower.

Also read: Market Wrap: Bitcoin Falls to $48K as Fed’s Powell Makes No New Promises; Ether Drops