Behind the decreasing volatility, there are signs that the market is busy deciding the future direction of the Bitcoin price.
Bitcoin (BTC) starts a new week and a new quarter as if it were starting the a year afresh: just over $46,000. In what will seem like serious deja-vu for hodlers, the BTC/USD pair is pretty much at the same level as it was on Jan 1, 2022.
Price action has been quiet – too quiet, perhaps – in recent days, but behind the dwindling volatility, there are signs that the market is busy deciding on future direction.
From a macro to on-chain standpoint, there are plenty of signs to watch for in April. This happens in a context where Bitcoin holds its yearly opening price as support.
Cointelegraph examines five of these factors when it comes to BTC price developments over the new week.
Inflation Meets Printing of Fresh Money
Much has been made of the end of the post-crisis “easy money” period and the impact it will have on risky assets like Bitcoin. However, so far there is little sign that a fundamental change is taking place, while in Asia this week the opposite appears to be the case.
While more printing means more good times for risk assets, not even everyone agrees with the idea that the much-touted shrinking of balance sheets will last. Central banks, they say, will soon have no choice but to restart liquidity injections.
Spot Bulls Target $50,000
The lack of volatility is the main talking point among Bitcoin traders and analysts as Monday progresses.
Some classic but brief excitement around the weekly close fizzled out in a matter of hours, as the bears failed to strip the yearly open for support, according to data from Cointelegraph Markets Pro and TradingView.
Such data shows that BTC/USD is exactly where it was three months ago, but short-term price signals are already causing some to expect a continuation to the upside.
Buyers Withdraw their Coins from Exchanges in March
According to on-chain analytics firm Glassnode, there have been particular exits from exchanges in the past month: they have lost the equivalent of nearly 100,000 BTC.
In case investors are recreating fund-buying behavior from after the COVID-19 crash, the implications should be clear, but may take time to unfold. In 2020, although the BTC/USD pair recovered after falling 60% in days, it was not until Q4 that price behavior really started to change.
The Altseason
An unusual development has occurred when it comes to Bitcoin’s relationship with altcoins: the combined open interest and volume in the altcoin derivatives markets has surpassed that of Bitcoin for the first time in over a year.
This outlook is consistent with data that showed considerable inflows into altcoins last week, which one commentator says shows increased risk appetite among investors.
Hash Rate Reaches New All-Time High
Following the difficulty record of the Bitcoin network, the hash rate has reached new all-time highs.
This shows that miners believe in the long-term profitability of participating in the network. The hash rate is now at 223 exahashes per second (EH/s), according to the data resource MiningPoolStats.
Although this is only an estimate of the processing power dedicated by miners, the hash rate has never been higher and, according to its proponents, it will continue to grow regardless of outside attempts to “slow down” Bitcoin.
By Audy Castaneda
