"But since the group has been moving together, people do watch (IBB)," he said, adding he also follows SOCL closely.
IBB has been holding above its 200-day moving average of 219. "In the selloff, it got to 221. We're still several percent above that, but I'd still say it's testing it," he said.
Read MoreNasdaq leads market lower
Redler said if IBB does break the 200-day and doesn't quickly return above it, it would be negative for the whole group and market. "If you break the 200-day and you can't get back above it, … that tells people there's more downside to go," Redler said.
O'Rourke said a catalyst that boosted IBB in the past year was the mergers by biotech companies with Irish incorporated companies. "It became very popular to do this tax arbitrage. The problem is the stocks went so far that they're obviously correcting with the momentum-type names," he said.
A negative catalyst for the group came March 21 when it looked as if Washington was getting set to meddle with a group that had been a market leader. Rep. Henry Waxman, D-Calif., and other lawmakers sent a letter to a biotech industry leader Gilead Sciences, raising questions about the expensive pricing of its new Hepatitis C drug.
A major pharmaceutical trade group Thursday defended Gilead's new drug, Sovladi. The Pharmaceutical Research and Manufacturers of America said the treatments were a priceless breakthrough for those suffering from Hepatitis C. The treatments are $1,000 a day, or $84,000 for a 12-week treatment.
News of the letter hit just two days after Fed Chair Janet Yellen spooked markets with her comment that the Fed could move to raise rates six months after ending its bond buying program. The Fed reversed much of that concern Wednesday, with very dovish language in the minutes of its last meeting.
Read MoreDovish Fed lowers rates expectations
Some biotechs spiraling lower Thursday include Perrigo, Valeant , and Alexion.