Bitcoin (BTC) has entered its most significant lifelong consolidation zone, but may still crash into a “macro bottom,” warns new research.
In a Twitter thread On April 27, the chain analysis platform Material Indicators shed light on the importance of $ 38,000 for BTC price action.
Bitcoin circles an important checkpoint
After dwelling near liquidity at or above $ 37,700 on intraday time frames, data from Cointelegraph Markets Pro and TradingView show, BTC / USD has not yet made a clear move up or down, and traders have been left to guess which way the market will go.
Macro factors require further downside, as the impact of inflation and geopolitical strife is clearly felt in the stock markets.
At the same time, chain signals are anything but bearish, led by miners and their ever-increasing investment in hash rates.
Whether short or long term, $ 38,000 represents a critical historical price for Bitcoin.
“Since the outbreak of $ 20 in December ̵[ads1]7;20, BTC has consolidated in this area more than any other,” explained Material Indicators.
It added that the “control point” – mainly the price level with the highest volume – is now at “exactly” where the spot price currently works.
Where Bitcoin can go from here, however, is not obviously given this month’s price trend. Analyzing the 3-day chart, Material Indicators noted both bullish and bearish patterns that were repeated this week alone.
These involve moving averages for 50-periods, 100-periods and 200-periods on the 3-day chart.
“A small zoom to the 3-day chart shows that 3-day 50MA crossings below 100 3-day MAs have triggered the rally and interaction with the 3-day 200 MAs has either led to a rally or collapse to the macro bottom,” it noted.
“BTC has checked all of these boxes this week.”
Lost moving averages pile up
Regardless of direction, volatility is almost guaranteed thanks to the upcoming monthly closure. At the moment, BTC / USD is set to close April $ 6,000 lower than where it started.
Related: Ex-BitMEX CEO explains how Bitcoin will have reached $ 1 million by 2030
As Cointelegraph previously reported, the weekly chart produced the first four-period red candle since June 2020 at the end of last Sunday.
Meanwhile, two major weekly moving averages repeated a rare trend, which twice triggered a 50% BTC price decline this week.
Finally, Material Indicators brought whales into the picture. In addition to reaching below all three aforementioned moving averages, whale buying and selling at this crucial point is the key to determining future trajectory.
“Until BTC regains the key moving averages, these are considered distribution rallies used to sell the scratch or add short positions,” it wrote.
“Expect more volatility coming into the monthly close / opening. Will look for a new Trend Precognition signal on the monthly chart then.”
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