Bitcoin may be threatening lower levels but behind the scenes, demand is “up only,” data suggests.
Bitcoin (BTC) held on to fresh gains on April 14 after a rebound in line with Wednesday’s Wall Street open flipped the mood.
BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView
$40,500 now the level to hold
“So far so good, I expected a move to 41k but I doubt about going for an extra leg down to the green box (blue),” popular trader Crypto Ed commented overnight alongside a chart with near-term price targets.
“Coming hours a bit more up, followed by a correction. Retest of 40.5k and when that holds, we’ll go for 42-43k (white). Lose 40.5k and we’ll go for green box.”BTC/USD chart. Source: Crypto Ed/ Twitter
$40,500 showed no signs of falling at the time of writing, with volatility ebbing into Thursday and Bitcoin seeing no major threat to its bounce.
Zooming out, others took the opportunity to argue that despite the lack of bullish sentiment, Bitcoin itself was far from bearish this year.
— Matthew Hyland (@MatthewHyland_) April 13, 2022
The lower the time preference, the less cause for panic — year to year, fellow analyst TechDev demonstrated, Bitcoin had more than a passing resemblance to traditional market behavior, even after dropping over 50% from November’s all-time highs.
In focus this month was a similar chart pattern between Bitcoin now and the Dow Jones from the start of the 1990s.
“Times change. Assets change. Macro aggregate human behavior usually doesn’t,” TechDev summarized.
Bitcoin’s stocks correlation is nonetheless a cause for concern for some, with a drawdown tipped to impact price significantly.
Exchange withdrawals heat up
For Blockware lead insights analyst William Clemente, meanwhile, there were other reasons to keep the faith.
Cryptocurrency exchanges were losing BTC reserves at a rate rarely seen before, he noted Wednesday, implying that any rise in demand would compete with a rapidly-dwindling supply, boosting price performance further.
“On only 3 other occasions have we ever seen Bitcoin withdrawn from exchanges at this rate,” he wrote alongside data from on-chain analytics firm Glassnode.
Glassnode’s net position change indicator tracks both upwards and downwards changes in balances on 18 exchanges.
Exchange net position change annotated chart. Source: William Clemente/ Twitter
Exchange withdrawal spikes are a much debated phenomenon, and excitement among pundits has increased this year in line with accelerating demand.
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