One analyst, Filbfilb, said that this week’s drop is not ‘convincing’ as he reiterated others’ misgivings about the possibility of a near-term bullish continuation. Bitcoin (BTC) has barely recovered its losses on April 8 as new doubts emerge about the bull run continuing this month.
$56,760 Is “not a convincing bottom”
After losing 5% on April 7, bitcoin recorded just a modest rebound to hover around $57,000 at the time of writing, TradingView showed. After many failed attempts to crack the resistance that has formed near the all-time highs, most analysts and commentators have now become wary of a further drop and a temporary stop to more price gains.
The co-founder of trading suite Decentrader, Filbfilb, described this week’s current low of $56,760 as “not a convincing bottom.”
Based on April 7 reports, funding rates among the trading platforms call for a significant shakeout of leveraged long positions from those that are extensively bullish on a continuation. For Filbfilb, these rates remain ‘way too high’ according to his posts on his Telegram trading channel.
In the meantime, popular Twitter trader Cantering Clark pointed to BTC’s 20-week moving average (MA) which is still lingering near $40,000. The 20-week MA is a classic “line in the sand” for BTC price performance. Filbfilb commented on a comparative chart:
“More fuel for why I think April-May puts a lid on $BTC until later in the year. Simple as it is, this 20 week MA with a 2 standard deviation band above. At some point, these meet. Either it comes to us or we come to it. Hard to imagine this takes plus much higher up.”
Macro Now Favorable For Bitcoin Bulls
Despite growing institutional interest in recent weeks, powered by major new adoption announcements from various banks, signs of a slowdown were also starting to show on the day. The Purpose Bitcoin ETF experienced a small reduction in its bitcoin holdings after constant growth, with its assets under management (AUM) plunging in tandem from highs of $976 million to $944 million.
On the other hand, Grayscale’s Bitcoin Trust (GBTC) maintained its negative premium, an occurrence that has put pay to further BTC accumulation since February 2021.
“Not in a rush to get in a position. 54k first or up from here, both mean we’re starting a strong 3rd leg and plenty of upside waiting for us. BTC will break 60k and finally go much higher.”
Away from crypto, a buoyant outlook for US stock markets together with a weakening dollar may further serve BTC’s purpose in the near term. JPMorgan CEO, Jamie Dimon noted in his annual shareholder newsletter earlier in the week:
“With excess savings, new stimulus savings, huge deficit spending, more QE, a new potential infrastructure bill, a successful vaccine and euphoria around the end of the pandemic…U.S. economy will likely boom.”