Bitcoin (BTC) starts a new week in a precarious position after seeing its most extensive losses since November 2022.In a major comedown from ten-month
Bitcoin (BTC) starts a new week in a precarious position after seeing its most extensive losses since November 2022.
In a major comedown from ten-month highs, BTC/USD lost around 10% before the weekly candle finally closed.
At around $27,600, the culmination of a grim few days for long traders means that BTC/USD is now caught battling for last month’s support.
Market participants are in two minds as to how the situation might play out — some are betting on deeper downside, while others remain confident of retesting those multi-month highs.
Catalysts may come in the form of United States macroeconomic data releases later in the week, while markets are also gearing up for the next Federal Reserve interest rate decision.
With the recent correction taking some of the “greed” out of crypto sentiment, can the shock give way to more sustainable upside or is the bull market over, at least for now?
Cointelegraph takes a look at the data and opinions behind current BTC price action.
BTC price fights for support amid warning of “bigger corrective move”
It was a mercifully nonvolatile weekly close for Bitcoin, which at $27,600 nonetheless finished up $2,700 under its starting position.
This marked its most brutal week since the FTX debacle hit in November last year, Data from Cointelegraph Markets Pro and TradingView shows.
Currently targeting $27,000, BTC/USD now faces a decision — sit near current support, also a focus in March, or break out.
“Spot premium back to the same levels it was at previously while trading at this price range. Funding rates slightly negative across the board. Nothing insane yet,” popular trader Daan Crypto Trades summarized on the day.
Fellow trader Crypto Tony maintained his target of $26,600, while Caleb Franzen, senior market analyst at Cubic Analytics, said that higher levels must return for bulls to gain the upper hand.
“Bitcoin has been unable to break and stay above $27,820 (green range), which is a key level I’ve been sharing,” he explained alongside a chart.
“For short-term momentum to shift in favor of the bulls, I think we need to see price get (and stay) above this range. It continues to act as resistance…”
The latest data from the Binance order book meanwhile showed resistance increasing at $28,000.
According to monitoring resource Material Indicators, this was an attempt to push spot price lower in order to fill bids at more appealing levels.
#FireCharts shows a new block of ask liquidity suppressing #Bitcoin price, likely trying to push price into their bids in the $27.3k – $26.7k range. #NFA pic.twitter.com/ThOwqUT09R
— Material Indicators (@MI_Algos) April 23, 2023
On the more conservative side, trader Mark Cullen predicted that the worst was yet to come.
“A nice bear flag formed over the weekend, looking very corrective with volatility dropping while price increases & H4 bear divergences forming,” he tweeted on the day.
“I am looking for the range lows to get swept before Bitcoin has a bigger corrective move.”
PCE print due as markets “price in” new Fed rate hike
The week’s macro triggers come principally in the form of corporate earnings and economic data releases from the U.S.
These will center on GDP and jobless claims on April 27, as well as the March print of the Personal Consumption Expenditures (PCE) Index a day later.
Corporate earnings will also continue, while looming on the horizon is the May meeting of the Federal Open Market Committee (FOMC) at which the Fed will decide on its next interest rate changes.
The strength, or otherwise, of intervening macro data prints influences that decision considerably, Chair Jerome Powell has confirmed, with markets thus in “wait and see” mode until the last of the figures are in.
According to CME Group’s FedWatch Tool, however, consensus is now overwhelmingly in favor of yet another rate hike, further pressuring U.S. banks and the wider financial system.
The chances of another 0.25% hike currently stand at 85%.
“Expectations for a +25bps hike in the next FOMC meeting are high, but not reliable due to fluctuations,” investor Crypto Awakenings wrote in part of commentary on the day.
“A pause announcement by Powell can trigger a break above $30k for Bitcoin. If a hike is announced, it’s likely already priced in by the market and confirms a ‘sell in May and go away’ won’t happen in 2023. The pause may happen in May or July, with May being more probable.”
Trader Ash WSB likewise drew attention to the fact that the May hike was likely “priced in” by the market, suggesting less chance of a surprise if the Fed follows through.
BTC 4hr trading in down trend from
last 3 days after hitting $31k.$27,700 and $26,600 are important
support on chart.FOMC is on may 3rd and looks like
market is…
cointelegraph.com