Traders Say Threat of Long Bear Market Rises After BTC Price Drops to $39,200.
The cryptocurrency market took a downward turn on April 11 after concerns related to rising inflation, the prospect of more interest rate hikes by the US Federal Reserve, and fears of a global food shortage will cause widespread weakness in financial markets.
Data from Cointelegraph Markets Pro and TradingView shows that the bears broke the bulls’ defensive line at $42,000 in early trading on Monday to drop Bitcoin (BTC) to a daily low of $39,200 with several analysts projecting lower prices in the short term.
Below is what analysts are saying about Monday’s move lower and whether traders should expect more declines in the coming days.
USD 40,000 or It’s Over
Market analyst Michaël van de Poppe foreshadowed the drop below $40,000.
Following Monday’s pullback, van de Poppe posted a follow-up tweet addressing the rejection at $43,000 and offering insight on what level to watch as the next support. According to the trader, “the green zone” in the range of $43,000 to $44,000 would have to become support to preserve any budding bullish momentum.
This Bear Market is “Different”
Decentralized finance advisor and pseudonymous Twitter trader ‘McKenna’ offered some insight into the confusion many cryptocurrency traders have been experiencing over the past year was provided by who posted the following chart analyzing Bitcoin’s price action since April of 2021.
McKenna said that, “this has been the weirdest bear market I’ve ever seen,” and then added that, “I don’t even think we’ll see below $30k, I’m more for choppy price action in this range which is also hell. I just need Bitcoin to cool down and let my altcoins run.”
Crypto analyst and pseudonymous Twitter user ‘360Trader’ expressed a similar sentiment, by highlighting the consolidation range that Bitcoin has been fluctuating in since last November.
360Trader said that, “Bitcoin consolidation continues…leverage is in control…float continues to dry up…This is not going to last forever. Just put a Band-Aid on and keep pushing.”
Where is Bitcoin Going from Now?
Phillip Swift, Markets Analyst and Founder of LookintoBitcoin offered one last insight into the future of the BTC price through the publication of a chart showing the recent rejection of the price from the 1-year moving average (MA).
According to Swift, the 1-year MA “has acted as the pivot point for bull and bear markets throughout Bitcoin’s history.”
Swift said that, “you can’t really call it a bull market until we’re convincingly above the 1-year MA.”
It is worth looking at what professional traders have been doing since March 31. They have slightly reduced their bullish positions, in a move directly opposite to the margin trading markets, which have shown a significant improvement in sentiment during the first week of April 2022.
The paramount factor that could help explain such a move is the drop in Bitcoin price by 32% in the last twelve months. Futures traders have been cautious when building bullish positions using leverage, although BTC flirted with $48,000 last March 29.
It appears then, that professional traders are playing it safe while remaining hopeful that $50,000 and up is possible in the short term.
By Audy Castaneda
