Bitcoin (BTC) starts a new week in an uncertain place in uncertain times – is $ 40,000 now resistance?
The largest cryptocurrency has just closed a fourth red weekly light in a row, which has not happened since June 2020.
As cold feet over the macro market outlook continue to be the norm, there seems to be little that can comfort bulls when the week begins – and Bitcoin is not finished selling yet.
Based on $ 4,000 in losses over the last four days alone, price targets now focus on retesting liquidity levels further towards $ 30,000.
It’s not just doom – long-term holders and key participants like miners are showing a more positive attitude when it comes to Bitcoin as an investment.
With that in mind, Cointelegraph takes a look at the forces at work in shaping BTC price action in the coming days.
The Asian qualifiers are catching up with French electoral aid
The most important external event for risk assets at the beginning of the week is the French election, which was won by incumbent Emmanuel Macron.
A sigh of relief for market participants worried about a surprising victory from far-right rival Marine Le Pen, Macron̵[ads1]7;s second term is expected to lift French stocks especially at the opening of April 25 and the euro as well.
The European Union, like the United States, is facing a strong cocktail of inflation and falling bond markets, while the European Central Bank (ECB) is still not taking decisive steps to raise interest rates or reduce the balance sheet by almost $ 10 trillion.
Bitcoin was untouched by the Macron victory, and risk assets are already struggling with a downturn in Asia on April 25, while COVID-19 in China rattles sentiment.
The Hang Seng index in Hong Kong is down 3.5% on the day so far, while the Shanghai Composite has fallen 4.2%.
With crypto in abundance strongly correlated with stock market movements at the moment, a repeated performance from Europe and the US will give clear directional signals.
“The concern is that the current political support that the government has already put in place may not be effective because of Covid’s policies as activity has slowed down,” said Jenny Zeng, co-head of Asia Pacific interest rates at global asset management firm AllianceBernstein, Bloomberg.
Even before the losses on April 25, the last week was already painful for equities, as market commentator Holger Zschaepitz noted.
“Global equities lost $ 3.3 tonne in mkt cap this week as US equities – after peaking Thursday morning – experienced a steady fall lower as investors appear to reconsider why they have bought risk assets in the world filled with so much uncertainty,” he said. told Twitter users April 24:
“Global equities worth $ 107.6 billion, equivalent to 127% of GDP.”
A new post the flag the so-called Buffett indicator – the ratio between the total valuation of US stock markets and GDP – is still in what he called “problematic” territory of over 100%.
The dollar strength is back with a vengeance
One component of the macro landscape that is stuck in bullish mode – to the annoyance of crypto traders – is the US dollar.
The US Dollar Index (DXY), after swinging to two-year highs last week, now looks set to continue its upward trend.
At 101.61 at the time of writing, DXY is challenging its performance from March 2020, when the coronavirus crash caused values to fall worldwide.
The strength of the dollar has rarely been a boon for Bitcoin, and the reverse correlation, although criticized by some, appears to be well under control this month.
“Looks like the DXY developer announced a token burn or something,” the popular trader Crypto Ed joked in response to the last move.
For Preston Pysh, host of Investor’s Podcast Network, something is not working properly.
“We got the BoJ to implement Yield Curve Control while the Yen collapses and we have the Fed raising 50bps while the dollar takes new heights,” he said. warning April 25. “
“Something probably feels like it’s about to break …
Weekly chart prints the fourth red light in a row
Bitcoin looks anything but rosy on April 25. While the weekend managed to avoid significant volatility, the weekly closing still disappointed, coming in just below last week’s level.
This still means that there are now four red lights in a row on the weekly chart, something Bitcoin has not seen since June 2020, data from Cointelegraph Markets Pro and TradingView show.
The downtrend then continued overnight to see the BTC / USD fall below $ 39,000, a position it maintains at the time of writing.
Traders look at various chart functions for clues as to where the pair is heading, but bullish hints are decidedly few and far between.
For the popular trader and analyst Rekt Capital, it is the Ichimoku cloud that threatens overhead that will lead to further losses for Bitcoin.
During retest 1 #BTC false collapse from the cloud before reversing
During retest 2 $ BTC evil sub-Cloud before backing
Retest 3 is now underway
BTC must reclaim Cloud as support
– Rekt Capital (@rektcapital) April 24, 2022
The popular analyst Cheds, author of Trading Wisdom, meanwhile saw a potential cross below the 200-period moving average on the three-day chart.
This would be significant, he claimed this weekend, as the last time this happened after a bull run was the bottom of the bear market in 2018.
“Not a prediction, just an observation,” he said warn.
Regarding the theme of December 2018 and its $ 3100 floor, Matthew Hyland, known as Parabolic Matt on Twitter, produced further comparisons between that period and the current BTC price action.
In the long run, he said, keeping $ 37,600 now is “crucial.”
#Bitcoin comparison of 2018/2019 Bear Market Bottom compared to the current structure BTC has been in since January this year
✅Similar time frame
✅Series with lower heights and higher descents
✅Creating a higher high
✅Retreatment after the first higher high
Crucial $ 37.6k holder pic.twitter.com/kzQhvZUTMr
– Matthew Hyland (@MatthewHyland_) April 23, 2022
“When I look for that sweep, I will then look for signs of a relief rally to play from,” another Twitter expert Crypto Tony added on April 25 as part of his own analysis.
Hodlers set a new record
The “choppy” nature of lower timeframe price trades on Bitcoin makes it an uninspiring trade for anyone other than the most experienced players.
As such, it may come as no surprise that the majority of breeders choose to stay away and do what they do best.
This is now reflected in chain data, which shows that the share of the Bitcoin supply that has been dormant for at least a year is now at its peak.
Referring to figures from the analysis company Glassnode in the chain, economist Jan Wuestenfeld noted that this means that the offer is more generally “older.” Proportionally, more coins are kept longer instead of being used.
According to Glassnode, the offer that has now been dormant for a year or more has broken 64% for the first time on record.
– Jan Wüstenfeld (@JanWues) April 24, 2022
HODL Waves, a Glassnode indicator showing hodled coins of all ages confirms the trend. Since December 2021, the 1-2-year supply share has increased more than anyone else – from less than 10% then to almost 15% this week.
The 3-5-year bond with hodled coins also increased its presence in Q1.
Basics still point to the moon
It is not just random stubborn hodders who stubbornly refuse to reduce their BTC exposure despite the bleak outlook.
Related: Top 5 cryptocurrencies to watch this week: BTC, DOT, XMR, APE, CAKE
A look at Bitcoin’s basic network shows that miners are also anything but bearish when it comes to investing.
A frequent story this year, but nonetheless an impressive one, given that the price is moving in the opposite direction, both Bitcoin’s hashrate and difficulty on the network will reach new all-time highs this week.
Depending on the price performance, the difficulty level should be adjusted up by around 2.9% in two days, setting a new record of 29.32 trillion in the process.
Emphasizing the competition to participate in mining, difficulties join the hash rate – an estimate of the processing power dedicated to the blockchain – which is already at its highest ever.
Estimates vary from source to source, but raw data from MiningPoolStats underscores the “just up” trend when it comes to hash rates – a key trigger, some argue, for subsequent bullish price performance.
The trend of increasing the hash rate is nothing new, having been predicted for a long time as investment continues to grow.
As Cointelegraph previously reported, from the beginning of April, 20% of Bitcoin mining operations were carried out by listed companies.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trade involves risk, you should conduct your own research when making a decision.