2023-04-28 18:04:47
Bart Simpson is back on the bitcoin chart, but even he mightn’t break the crypto price this week.
The price of bitcoin rises and falls by 5-10%
Bitcoin jumped more than 5% for the week following shares of First Republic Bank (FRC) closed the trading day down more than 50% on April 25. Fears regarding another possible US bank failure whipped up sentiment. This once more drove a lot of investors to the crypto market.
After all this, the bitcoin exchange rate showed a particularly rapid collapse one day later, on April 26 (flash crash). The exchange rate fell from $29,800 to $27,200 in 60 minutes. Most rumors suggested that the crash was caused by the sale of Mt. Gox bitcoins from a wallet linked to the US government. However, as it soon turned out, this just an automatic message gone astray volt. This in turn launched a series of automated trading robots.
The figure drawn on the graph published this week is often called Bart Simpson, because the exchange rate closely follows the shape of the cartoon’s hair. In fact, it always indicates speculation in the market of a particular asset. The Bart pattern is a way to describe the consolidation phase of the market, be it the traditional stock market or the crypto market. It’s really a trading jargon that specifically refers to the technical manifestation of a chart.
The week’s most important cryptocurrency news in one place
The world’s largest crypto exchange, Binance, has finally decided not to buy the swindled crypto lender Voyager. At the end of 2022, Binance announced that its American subsidiary had entered into a billion-dollar agreement with Voyager Digital Ltd. to acquire its assets. The American Securities and Exchange Commission (SEC) objected to the acquisition for the first time. But following a court approval, the acquisition might continue. However, this week Voyager itself made it public that the deal with Binance US fell through. In addition, they added that their situation has now become “disappointing”.
Meanwhile, Binance returns to Russia. Users in Russia have reported that they can once once more use their locally issued Mastercard and Visa cards on the crypto exchange more than a year following the sanctions were imposed.
Austria’s second largest bank entered into a partnership with the Bitpanda trading platform. The cooperation between the Raiffeisen banking group and Bitpanda was realized shortly following the crypto exchange entered into a similar agreement with the German mobile bank N26. Austrian Bitpanda will provide crypto investment services for both banks.
If the US macro data no longer cause surprises, then the FED’s decision will
The US consumer spending index (PCE), declared the macro event of the week, did not serve as a catalyst in the market. The figures corresponded roughly to the prices previously quoted by the dealers.
“Overall, nothing is shocking the market right now,” one analyst said.
Attention is increasingly focused on the macro events of the coming week. The Federal Reserve’s next interest rate decision is coming. According to analysts, there is still a strong chance of further interest rate hikes, so despite the appearance of the PCE indicator, investors were not interested in this now.
Despite the fact that interest rate hikes are still expected by June, the market is also expecting at least 2 more this year interest rate reduction also started pricing. Despite the fact that the Fed still did not say that it would support a rate cut this year. That is why next week’s interest rate meeting might be decisive for future investor sentiment.
According to CME Group’s FedWatch analysis tool, the market already considers a 0.25% interest rate hike a 90% certainty. Moreover, analysts are more and more certain of this, because the probability value of the indicator increased by 5% in one day.
Finally in profit following 155 days
Blockchain data shows that long-term Bitcoin investors may see gains in their wallets for the first time in 11 months.
The LTH SOPR indicator shows the profitability of long-term owners of Bitcoin. The position of the index now predicts that bitcoins held for at least 155 days or more can now be sold at a profit.
In the past, the indicator was able to predict significant market rallies when a similar profitability trend changed. So it’s worth monitoring its value even now. According to Glassnode data, the seven-day average of the indicator exceeded the current level for the first time since May 2022.
SOPR is the ratio of spent transaction output, or UTXO value, in US dollars. This is compared to the value at which the relevant wallet spends the UTXO on the chain. Transaction output is not used later as input in a new transaction. That is, UTXOs should actually be seen as the change left in the pocket following payment.
The increase of the ratio above the current level – in May 2020, May 2019 and November 2015 – also coincided with the beginning of the upward trend. After that, the market eventually rose over several years.
The graph shows that extreme values below the 1 level have historically marked periods of investor capitulation. And these coincided with local market lows. Meanwhile, values above 10 marked the market peaks.
The number of bitcoins stored on exchanges is increasing
With BTC/USD regularly hitting consecutive multi-month highs since mid-March, the temptation to sell has undoubtedly increased in the eyes of both long-term and short-term investors.
According to analyst firms CoinGlass and CryptoQuant, Binance alone now has 51,000 more BTC on its books than it did 30 days ago. Compared to March 10th, when BTC/USD briefly peeked below the $20,000 support – the BTC balance held on Binance increased by almost 100,000 BTC.
The aggregate volume increased by a total of 14,000 BTC in 30 days, so there was also a significant reorganization between the exchanges in the recent period. The combined BTC balance of the exchanges tracked by Coinglass is currently 1.919 million BTC.
At $30,000, it’s the eye of the dealers
Investor movements in recent weeks have arguably increased the pressure on the bulls to push the price past the magical $30,000.
The area around this level is the site of record transaction volume, so the significance of $30,000 is no longer just psychological.
The current state of liquidity across exchanges as tracked by trading platform DecenTrader shows that $35,000 is a key zone for liquidating leveraged BTC short positions.
“The Long Short ratio now shows that there are more short positions than long positions,” the trading platform said in a report.
Popular trader and analyst Rekt Capital takes a closer look at the events. He suggested that we might see a potential repeat of previous bull market trends as the price strengthened following the end of last year’s bearish trend.
“Bitcoin has already broken its downtrend, so now it’s all regarding continuing the new uptrend. The question is whether a retest is needed or not,” RektCapital tweeted.
However, history suggests that the medium-term and long-term outlook are all driving the price of bitcoin in an uptrend.
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