Bitcoin (BTC) starts the second week of April with a slight decline as the bulls struggle to maintain support above $40,000. After a weekend of extremely low volatility, the latest weekly close saw market nerves come back and classically BTC/USD fell in the last hours of Sunday. Meanwhile, it is stated that there is no buyer demand, although macro forces promise big trend changes. So what will happen this week?
Will there be a “big drop” in Bitcoin price?
Monday starts with a $42,000 retracement where BTC/USD briefly lost overnight as it plummeted towards the weekly close. In this process, Bitcoin, which reached $ 41,771 in Bitstamp, saw the lowest levels in weeks, matching those on March 23. In the meantime, he gave up all his earnings from the previous period. However, this could result in a retest of previous resistance as support.
However, many traders hope that a reversal will begin soon. As we have also reported as Kriptokoin.com, Credible Crypto pointed to Bitfinex whales behind the price movements. Credible Crypto commented on both the Bitfinex whale buying and new chart data showing that Bitcoin’s Aroon indicator has been bullish in recent days. Designed to identify uptrends or downtrends in an asset, Aroon has only made six “crossovers” from bearish to bullish since 2017, Bitcoin’s previous highest peak.
Rekt Capital is $43,100 as support in BTC, above that On the other hand, he stated that it will be positioned for a higher move in the $43,100-50,000 range. Apart from that, analyst Michaël van de Poppe also noted that Sunday’s late decline closed the potential for a CME futures gap to provide a short-term price target at the start of Monday.
Stocks generally under pressure
Asia A gloomy day has begun for stocks as China continues to lead with widespread losses thanks to the latest coronavirus quarantines. Both the Shanghai Composite Index and Hong Kong’s Hang Seng fell over 2 percent in morning trade. Also, the ongoing geopolitical tensions focused on Russia showed no signs of change. A glimmer of hope for the euro came in the form of incumbent French President Emmanuel Macron’s potential lead over his far-right rival Jean-Marie Le Pen in the polls.
Beyond the short term, however, analysts are watching for trends: skyrocketing inflation, bond market losses, and central banks’ failure to respond so far. The European Central Bank (ECB) will meet this week with a focus on controlling inflation – ending asset purchases and raising interest rates. This highlights the challenges faced by equities and risk assets in the current environment. Commentators agree that the inflationary environment and related central bank measures will reduce demand for Bitcoin and crypto.
Stocks and Bitcoin falling together?
For Arthur Hayes, former CEO of derivatives giant BitMEX, there is still a bullish case for Bitcoin as a store of value against failed fiat. In his latest blog post published Monday, Hayes reiterated his warnings that for the average investor exposed to a significant risk asset, the pain precedes the gain. The future may see a shift away from US dollar hegemony by both nation-states and individuals, but meanwhile, macro forces will continue to weigh on crypto.
If stocks are to dive when central banks conceptually take action to combat inflation, crypto’s growing correlation with them only means one thing. “The short-term (10-day) correlation is high and the medium-term (30-day and 90-day) correlations are moving up and to the right. This is not what we want,” Hayes said, discussing crypto correlations with the Nasdaq 100 (NDX) and used the following statements:
To support selling fiat and buying crypto before an NDX crash, correlations across all timeframes are noticeably stronger. It should be a low trend. Can stocks really see half their value removed as a result of the Fed and its actions? Let’s be clear – the Fed isn’t planning to grow its balance sheet any time soon, which means stocks won’t go up any further.
Sentiment is leaving traditional markets
The Crypto Fear & Greed Index, which showed “greed” across crypto at the end of March, is now back in “fear” territory. The metric dropped half its normalized score in less than two weeks as the gloomy mood returned to traders. On Monday, Crypto Fear & Greed was measured at 32/100, while the traditional market equivalent was higher at 46/100, described as “neutral.” But in the meantime, Van de Poppe reminded readers not to trade based on emotion cues.
Fundamental factors in the Bitcoin network hold belief
A glimmer of hope comes from a familiar source this week – despite all the price drops, Bitcoin’s network difficulty is in the next few days will decrease by only 0.4 percent in The difficulty, arguably the most important aspect of the self-sustaining paradigm of the Bitcoin network, will adjust downward from its all-time high to reflect changes in mining composition.
The small size of the regulation indicates that miners remain financially viable at current levels and are not struggling despite the 10 percent BTC drop over the past week. Hashrate also maintains its high levels.
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