Bitcoin (BTC) is at a “pivotal” point and faces macro forces that could influence it for “months to come,” fresh research says.
In its latest market update on April 8, trading suite Decentrader called for more attention to Bitcoin’s “yearly pivot” price.
All eyes on the yearly pivot
After giving $43,000 support two retests this month, Bitcoin has punctured market sentiment, having reversed direction near $50,000.
The move below $46,200 — the opening price for 2022 — was particularly hard to swallow, as it had marked the BTC price resistance ceiling since Jan. 1.
As lower levels get revisited, calls for $40,000 or even lower are emerging, but for Decentrader, the zone for bulls to hold is already here. This comes in the form of the yearly pivot, a price level that in 2022 lies at around $43,500 — right by April 8’s spot price.
“Bitcoin was rejected off the Yearly Pivot, a level which has not been broken in either of the last 4-year cycle bear markets,” analyst Filbfilb explained.
“This, although highly probable, was a disappointment for the bulls, which had an injection of hopium, having broken the major weekly support/resistance level of circa $43 thousand.”BTC/USD chart with yearly pivots marked (screenshot). Source: Decentrader
Should the current scenario truly represent a “bear market” phase for BTC/USD, a close above the pivot, notably on higher timeframes, would not only be bullish but a historically unusual event.
“A break above the yearly pivot would be a break from the 4-year cycle norm and could suggest that Bitcoin will be on the way to significantly higher prices, but for the immediate term, the weekly level needs to be supported by the bulls, to avoid dropping back into consolidation,” Filbfilb added.
Liquidity stacks up
Looking beyond the pivot, the coming months seem firmly tied to central bank policy as inflation bites and steps to combat it intensify.
Related: Bitcoin plumbs April lows as US dollar strength hits highest since May 2020
The United States Federal Reserve’s balance sheet reductions are likely to pressure stocks and risk assets, analysts agree, with Bitcoin thus standing to lose appeal.
Filbfilb agreed on these powerful headwinds, arguing that the Fed’s action could influence BTC price action “for months to come.”
How low Bitcoin could go, however, may well depend on liquidity grabs. Sentiment, shown via derivatives funding rates, continues to favor the upside despite the spot price action weakening, raising the chances of a liquidation cascade downwards.
This week already saw the largest long liquidation episode since January, data from on-chain monitoring resource Coinglass shows.
Crypto liquidations chart. Source: Coinglass
Liquidity both above and below the spot price means that the potential for a squeeze in either direction remains high, Filbfilb wrote, with the potential upside target still north of $50,000.
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