Bitcoin holds $40K over Easter but thin liquidity, ‘capitulation’ risk haunt traders

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Bitcoin (BTC) selected compression over the Easter weekend, sparing nervous merchants a recent dive beneath $40,000.

BTC/USD 1-hour candle chart (Bitstamp). Supply: TradingView

Derivatives merchants take no dangers

Information from Cointelegraph Markets Pro and TradingView confirmed BTC/USD appearing in a narrowing vary with $40,700 as its ceiling Saturday and Sunday.

The pair noticed little motion as the vacation interval started, with United States equities markets off from Good Friday onwards, permitting crypto to keep away from correlation-based volatility.

With Monday likewise a non-trading day, Bitcoin was set for 4 days of “out-of-hours” buying and selling. Whereas that meant its shares correlation mattered much less, there have been different forces at play able to spook sentiment.

Market liquidity stayed decrease than on workdays, and whereas commonplace, some feared that any sudden strikes may very well be exacerbated on account of thinner order books.

Analyzing derivatives strikes over the weekend, Deribit Insights, the analysis arm of buying and selling platform Deribit, flagged liquidity as one consideration influencing real-time investor choices.

A slight zoom-out from well-liked dealer and commentator Pentoshi in the meantime delivered a extra cautious perspective.

For him, solely a reclaim of ranges considerably past the present slim buying and selling vary on low timeframes would suffice for a extra bullish feeling on what may come subsequent for BTC/USD.

“44.5k most vital spot for bullish momentum at the moment. 42k 1D Resistance,” he summarized to Twitter followers on Saturday alongside an explanatory chart.

“Beneath bias is for re-distribution and one other leg down. Suppose patrons must step in fairly rapidly.”

BTC/USD annotated chart. Source: Pentoshi/ Twitter

100 days until “capitulation”?

Pentoshi was meanwhile not the only voice predicting long-term gain but short-term pain for Bitcoin — a narrative, which had gathered momentum throughout 2022.

Related: Bitcoin clings to $40K support as focus returns to BTC price ‘supercycle’

Analyzing market actions, Kevin Svenson, well-known on social media for his bullish sentiment on BTC, warned that present chart conduct was mimicking the interval simply earlier than Bitcoin’s bear market crash in late 2018.

Whereas that occasion adopted an extended interval of decrease lows all year long, Bitcoin has been making larger lows in 2022, he famous, however it will not take a lot for the tables to show and “capitulation” to enter.

“The distinction between these larger lows and a breakdown is important proper now, so simply being blindly on one facet and never contemplating the rest is a little bit bit silly for my part,” he stated.

Svenson added that Bitcoin was “getting there” by way of following a historic sample of placing in a macro low round 800 days after every block subsidy halving. The final halving — on Could 11, 2020 — was 706 days in the past.

The views and opinions expressed listed here are solely these of the writer and don’t essentially replicate the views of Each funding and buying and selling transfer entails threat, it is best to conduct your personal analysis when making a choice.