Easter weekend makes Bitcoin bulls suffer.
Bitcoin (BTC) starts a new week with everything quiet in the traditional markets but with a storm brewing when it comes to the crypto space.
As the long Easter weekend continues for the United States and much of Europe, traders are watching whether Bitcoin can hold steady for four days without the involvement of professional investors.
Since Good Friday, the BTC/USD pair has experienced sideways action punctuated by bouts of sudden volatility to the downside. That continued overnight into Monday, and now the $40,000 level is out of reach again. What will the atmosphere be like in the coming days?
Here we look at potential market-moving factors that may influence Bitcoin price performance this week.
Holiday Cheer Costs Bitcoin $40,000
It is a frustrating time for Bitcoin spot traders. Without traditional market guidance, Bitcoin faces four “after-hours” trading days, meaning liquidity is tighter than normal.
This scenario has already occurred several times during the Easter weekend. Although most of the time it has traded sideways, the BTC/USD pair has suffered bouts of flash declines from which it has had a hard time recovering.
On Sunday night, the market fell over $1,000 in a matter of minutes, including an $800 loss on a single one-minute candle.
With this, the support of $39,000 was lost, as confirmed by data from the on-chain monitoring resource Material Indicators.
On Friday, Material Indicators noted the block of buyer support immediately below the spot price, which is now non-existent and opens up the possibility of a much deeper pullback, involving Bitcoin’s 200-week moving average (200 WMA).
The 200-week moving average is currently above $21,000, according to data from Cointelegraph Markets Pro and TradingView. The level is highly significant as spot price has never broken it during bear markets, and has risen continuously throughout Bitcoin’s history.
Despite the potentially dodgy holiday price performance, few seemed surprised by the idea that crypto markets en masse are poised for further losses.
Macro has many surprises up his sleeve
With western markets closed until Tuesday, there is little room for a macroeconomic-induced move in the cryptocurrency space.
Asian markets were mostly flat throughout Monday; Hong Kong’s Hang Seng was up a modest 0.67% and the Shanghai Composite Index was down 0.67% at the time of writing.
However, the global financial markets have not been easy this month, as the current situation is uncharted territory. The increase in inflation, along with minimum interest rates, is one of the novelties.
For market commentator Holger Zschaepitz, the focus is on international bond markets, which have lost $6.4 trillion since hitting their all-time highs last year.
DXY Faces “Do or Die” Decision
DXY has a habit of running against the price of bitcoin, and while that inverse correlation has been broken to some extent in the past year, the odds remain that a major drop for USD is a boon for BTC.
“If we see DXY roll back on this trend line, get ready for a strong send,” market commentator Johal Miles summed up on Sunday.
Lowest Stock Market Balances since Mid-2018
According to the latest data, not only are buyers continuing to move large tranches of coins off exchanges into cold storage, but also the overall balance of BTC on those exchanges is now at new multi-year lows.
Figures from on-chain analytics firm CyptoQuant confirm that the balance of 21 major exchanges was 2.274 million BTC on Sunday. The last time the level was this low was in July 2018.
Sentiment in Cryptospace Diverges Towards “Extreme Fear”
The current state of the Cryptocurrency Fear and Greed Index may give investors another pause for thought. At 24/100 as of Monday, the index is back in the “extreme fear” zone, having more than halved since early April.
Although equally famous for its fickle nature, the cryptocurrency market sentiment could be a warning to those hoping the good times will continue regardless.
By Audy Castaneda
