Inflation

Bitcoin faces a battle for key BTC price support to start the week, while market participants stay optimistic about trend continuation.

Bitcoin (BTC) starts a new week under $30,000 as analysts’ predictions of a short-term support retest come true.

The largest cryptocurrency saw a classic dive following its latest weekly close as the latest gains evaporated, but will they return?

Ahead of a fairly innocuous week for macro data releases, catalysts are likely to come elsewhere as BTC price action decides on a key support zone.

Much is at stake for traders, as the week prior offered the opportunity to reinvestigate altcoins as Bitcoin itself cooled its upside. With a retracement now in effect, attention will be on whether those altcoins can hold at their own higher levels.

Under the hood, it appears to be business as usual for Bitcoin, with network fundamentals already at or near all-time highs, showing no definitive signs of a comedown this week.

It may be too early to determine how price performance will impact hodlers, but the temptation to sell at 10-month highs must be clear, with the percentage of the overall BTC supply now in profit at an impressive 75%.

Cointelegraph takes a look at these factors and more in the weekly rundown of potential Bitcoin price triggers.

BTC price: $30,000 hangs in the balance

After a “boring” weekend for BTC price action, volatility returned in classic style at the April 16 weekly close.

With it came a return to $30,000 for BTC/USD, marking its first major support retest since hitting 10-month highs above $31,000 last week.

Traders and analysts had widely predicted the move, arguing that it would constitute a healthy retracement to prepare for the continuation of the uptrend.

Re-bought everything that I took profit on.

I’ll reduce below $29.7K BTC and $2K on ETH.

Worst case scenario, I make a little less money on the overall positions. Best case scenario, I make a lot of money.

But generally speaking, risk is definable enough for me to re-enter. https://t.co/WH3vUVciY8

— Loma (@LomahCrypto) April 16, 2023

Cointelegraph contributor Michaël van de Poppe, founder and CEO of trading firm Eight, was among those eyeing a buy-in just below $30,000 but kept his options open in the case of a deeper correction.

“Bitcoin is getting towards the long areas. Back towards the range low, through which a sweep can be granted as an entry point towards $32K,” he told Twitter followers.

“$28,600 could also be a long entry, but then I think we won’t be starting to make new highs, for now.”

Analytics resource Skew noted how the dip had played out on exchanges, mentioning a “clean divergence” between spot sellers and derivatives traders.

$BTC LTF Aggregate CVDs & Delta
Spot driven sell off out of daily open here, there was a clean divergence between spot selling the bounce early & perps longing into the bounce. pic.twitter.com/fnpk3x8VbV

— Skew Δ (@52kskew) April 17, 2023

“This is exactly the BTC retest I was talking about,” popular trader and analyst Rekt Capital meanwhile continued, striking an optimistic note.

“$BTC is currently successfully retesting the top of the Bull Flag price broke out from a few days ago. Hold here would be a good contributing sign for continuation.”

An accompanying chart showed BTC/USD close to resting on an important trend line on daily timeframes.

A more cautious Daan Crypto Trades nonetheless flagged a tug-of-war between bulls and those simply trading the current range.

“Bitcoin Range Traders having the time of their lives while breakout traders are getting trapped on these range deviations/wicks,” part of commentary stated on the day.

“Likely to keep ranging until one side gives up.”

Earnings dominate macro debate

After a key week of macroeconomic data releases, the coming days are set to offer risk asset traders some comparative respite.

United States jobless claims and manufacturing figures will come toward the end of the week, but the macro focus will be elsewhere — specifically on earnings.

These are due, among others, from heavyweights Tesla and Netflix, as well as a slew of banks — all keenly watched by market participants in the wake of recent events.

“Earnings season is officially here,” financial commentary resource The Kobeissi Letter summarized.

Last week, Tedtalksmacro, a financial commentator also focusing on crypto, summed up the current environment as highly favorable to continued Bitcoin upside.

“Price breaking bear market structure, macro data trending favourably, momentum oscillators reset + USD liquidity higher than pre-tightening levels… Yet the majority continue to look for swing shorts to new lows,” he stated.

“~500 days of bear has created a strong recency bias…”

However, the picture appears muddier when it comes to stock markets themselves, with consensus among market participants being hard to ascertain.

Sven Henrich, CEO of NorthmanTrader, called for more proof of a breakout for the S&P 500 “bull market” narrative to become valid.

“Some day they will be correct, but in my view, based on history, a new bull market is not confirmed until $SPX moves above the monthly 20MA and SUSTAINS such a move, i.e. defends it as support,” part of a tweet read last week.

Henrich was considering a claim by Tom Lee, managing partner and the head of research at Fundstrat Global Advisors, who described bears as “trapped.”

“The other measure here is the weekly 100MA which is just above 4200. While developments have been technically bullish since the October lows markets are near these key resistance points with the $VIX on the floor of its multi year uptrend,” Henrich continued.

“Will recent liquidity injections, which have contributed to suppressed volatility, be enough to sustain a move above resistance as the economy is approaching a recession per the Fed staff? That’s the big question I suppose everybody has to ask themselves.”

Bitcoin mining difficulty eyes fifth record-high in a row

In what is becoming a bi-weekly regular, Bitcoin network fundamentals are offering nothing but new all-time highs.

This week, difficulty is due to inch higher — currently by an estimated 0.45% — according to estimates from monitoring resource BTC.com.

This will mark the fifth increase in a row, which has not happened since February 2022.

Since the start of 2023 alone, over 4 trillion has been added to the difficulty tally, while the hash rate is also continually setting new highs.

Raw data from MiningPoolStats recently estimated the latest all-time high as 413.4 exahashes per second (EH/s) on April 15. On Jan. 1, the estimated hash rate was 285 EH/s.

As Cointelegraph previously reported, however, hash rate changes in and of themselves may not be relevant as a yardstick for Bitcoin health if measured using exact figures.

As Jameson Lopp, co-founder and chief technology officer of Casa, stated in a new blog post released on the same date as the all-time high hash rate estimate, all may not be as it seems.

“Whenever you see someone claiming that a change in the network hashrate is newsworthy, you should always question the method and time range used to achieve the hashrate estimate,” he summarized after comparing various methods of hash rate estimation.

In Bitcoin, only old hands remain

As $30,000 appears and gets tested as support, the temptation to sell among those who weathered the 2022 bear market is increasing.

Mean on-chain transaction volumes have hit multimonth highs, according to data from analytics firm Glassnode.

Overall, more than three-quarters of the mined BTC supply is now in profit — the most in a year and arguably a clear incentive to take some of that profit off the table.

Analyzing market composition, Glassnode lead on-chain analyst Checkmate had some encouraging conclusions.

Long-term holders currently outnumber short-term holders or speculators significantly, with the 2022 bear market sparking a shakeout that has left the market more resilient to price fluctuations.

“Nobody except the hardcore HODLers remains, nobody knows we’re up 100% from the lows. They will probably only be back for real as we approach ATHs,” he predicted in part of a tweet this week.

Checkmate added that “Almost none of the folks who have been here for several months+, are spending right now.”

“They appear to require and demand higher prices before they sell. I certainly know do,” he wrote.

Crypto “greed” inches from November 2021 peak

Bitcoin may be far from its all-time high of $69,000, but one metric rapidly homing in on repeating the climate of November 2021 is the Crypto Fear & Greed Index.

Related: What is the Crypto Fear and Greed Index?

The return to $30,000 was marked by a rapid increase in “greed” throughout the crypto market, its data shows.

As of April 17, Fear & Greed scored 69/100, just 10% away from its 75/100 mark from when BTC/USD traded at its most recent peak.

Cointelegraph has often reported on the potentially overheated atmosphere within sentiment this year, and now nerves appear to be spreading.

“Now this isn’t a metric I swear by as it is lagging, but it gives a good indication of when to look to de-risk and be cautious,” popular trader Crypto Tony reasoned about the Index over the weekend.

“The last time we came up to the 75 region was back on November 7th 2021 when Bitcoin was trading at over $65,000. Food for thought.”

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.