Bitcoin fails to hold the $40,000 level as the US dollar currency index finally weakens.
The price of Bitcoin (BTC) failed to break above the $40,000 level on April 29, despite the US dollar falling from its 20-year highs.
Bitcoin is back 40% from its all-time high, but on-chain analysts say it is “starting to bottom out.”
Data from Cointelegraph Markets Pro and TradingView showed that the BTC/USD pair reached support near $39,300 after failing to hold the $40,000 level.
The pair had managed a modest rise despite a “parabolic rally” in US dollar strength throughout the week.
The US dollar index (DXY) finally started to cool down on Friday after reaching its highest levels since 2002.
Despite its inverse correlation, the BTC/USD pair had yet to show any signs of direct benefit from the change in sentiment.
A Trader Sees $40,600 as a “Crucial” Level to Break
Cointelegraph contributor Michaël van de Poppe was confident that the bullish momentum would return to Bitcoin in the short term.
“Bitcoin is entering a tight playing field and is poised for a big momentum move,” he told his Twitter followers that day.
“I am betting on the upside as DXY is also showing some weakness. First, you have to break through the crucial level of: $40,300-40,600”, he added.
Van de Poppe had previously highlighted that current spot price levels were crucial in opening the way to $42,000 and beyond.
The tailwind for BTC came from Asian markets as the Shanghai Composite Index rose 2.4% and Hong Kong’s Hang Seng gained 10% on the day, in a broad recovery from the previous sell-off induced by the Coronavirus.
On Twitter, Holger Zschäpitz, market maniac and Author of ‘Schulden ohne Sühne?’ a book on states’ addictiveness to debt, posted that, “Hang Seng Tech Index jumps 10% after China makes another pro-market statement. A meeting is set to occur soon between government & major tech comps, raising hopes that the regulatory landscape for this industry is set to ease going forward.”
European indices were flatter; Germany’s DAX rose 1.2% and the FTSE 100 rose 0.35% in London.
An Investigation Warns of Holders’ “Capitulation”
Examining who among Bitcoin holders is selling under current conditions, popular analyst Root identified changing trends among long-term holders (LTHs) — those with coins standing still for 155 days or more.
Those who bought when the Bitcoin price was between $18,000 and all-time highs of $69,000 – a significant part of the LTH base – are being forced out by external forces, he warned.
“They are de-risking/capitulating due to macro conditions,” read part of a Twitter thread, with Root adding that “price has been holding up really well, which is a bullish sign.”
As Cointelegraph reported, the percentage of BTC supply idle for a year or more has hit new all-time highs this month, according to data from on-chain analytics firm Glassnode.
By Audy Castaneda
