Bitcoin fails to hold $75,000 but analysts see hopeful signs
Halfway through April, bitcoin is faring much better than it has since May, up roughly 8.6%.
Bitcoin almost hit $76,000 on Tuesday, but failed to sustain the key $75,000 level and fell to around $74,000 early Wednesday morning, underscoring that macro and geopolitical drivers continue to shape the flagship crypto asset’s price.
Bitcoin has been stuck in a tight range for two months, unable to break significantly as inflation headlines, the Mideast conflict, and a lack of a fresh catalyst all continue to hinder momentum.
Bitfinex analysts told Sherwood News that the price movement from the $70,000 range was mostly spot-led, though open interest also expanded, as spot volume and larger orders entered the market, pushing the price to the $75,000 range.
They added that bitcoin’s pullback is the first since the price breakout and is expected, given that volume tends to turn to distribution after a sharp spike, returning prices to zones of deeper liquidity.
“The rally from $68K to $76K was real and On Balance Volume (OBV)-confirmed through April 14,” the analysts said, adding that while this is structurally positive, the latest candles are showing signs of retracement.
Halfway through April, bitcoin is faring much better than it has since May, up roughly 8.6%, according to CoinGlass.
Underscoring investors’ measured optimism, CoinMarketCap’s Fear and Greed Index is at 52 (neutral), its most positive level since mid-January.
Nic Puckrin, cofounder of Coin Bureau, told Sherwood that bitcoin is still driven by the macro backdrop, and the situation hasn’t changed materially enough to warrant a broader recovery.
“Even if it bounced back above $80,000, we could quickly see a retracement back to sub-$70K levels, marking the fifth and final leg down for this bear market cycle,” Puckrin said.
One hopeful sign is the institutional support, with bitcoin ETFs registering $411.5 million in inflows on Tuesday, bringing April’s total to $741.9 million in inflows, SoSoValue data shows.
Rajiv Sawhney, head of international portfolio management at Wave Digital Assets, told Sherwood that one clear indicator of a recovery will be bitcoin ETF inflows and whether they match the uptick in price action and volumes expected for a move higher in the regime.
Sawhney said the market has been in “max-fear mode” throughout the Iran-US conflict and was well hedged to the downside. As such, any additional bad news was absorbed by the market, and any semblance of relief, such as the announcement of a potential second round of US-Iran talks, was better received.
“We certainly are not out of the woods by any stretch of the imagination, but I would imagine that the fulfillment of these early indications will finally give the market permission to take on more risk and help BTC move back above the $80K level,” Sawhney said.
Structurally, Sawhney said that on the short-dated options side, we have small pockets of negative gamma that may help sustain momentum in the short term, but over longer tenures, the positive gamma wall remains, constraining significant momentum.
“Given this, I fully expect BTC to trade more like a step function, where further moves higher are met with momentary resistance and consolidation before another move higher, more slowly and methodically over sessions,” he said.
