Bears took a hefty swing at BTC price today, but traders say on-chain and technical analysis data point toward a short-lived correction where investors choose to accumulate on each dip.
The cryptocurrency market rally that began on April 1 ran into tough resistance on April 4, sparking a market-wide pullback during the afternoon session after exhausted bulls were overwhelmed by bears who managed to push Bitcoin (BTC) below $45,200.
Data from Cointelegraph Markets Pro and TradingView shows that once the afternoon sell-off broke below support at $46,000, the price of BTC hit a daily low of $45,133 before buyers emerged to bid it back above $45,700.
Here’s what several analysts are saying about the short-term outlook for Bitcoin and what could be in store moving forward in April.
Flipping resistance into support
Monday’s weakness on the Bitcoin chart was spotted early by crypto trader and pseudonymous Twitter user ‘ShardiB2’, who posted the following chart noting that its price was “starting to reverse” with the 4-hour candle coming close to the bottom of the channel.
The trader said,
“Could we slip to $44,300? Possibly, but if we do I [don’t] think it gets any deeper, the ONLY thing that is concerning is maybe tax selling, saw some last year…”
A more general explanation of the current price action was offered by on-chain data analyst Matthew Hyland, who posted the following chart outlining the major support and resistance levels for BTC in its current price range.
Hyland said,
“Bitcoin is trying to flip previous resistance into new support.”
Signs of heavy accumulation
Insight into which players in the market have been most actively accumulating Bitcoin lately was discussed in the most recent newsletter from on-chain analysis firm Glassnode, which noted that “shrimp and whales are the most aggressive accumulators of late.”
On the whale side, Glassnode pointed to “large public buyers such as the Luna Foundation Guard and MicroStrategy,” which have renewed their “emphasis on Bitcoin as pristine collateral” and “have commenced serious accumulation over the last two weeks.”
This whale accumulation can be seen in the red highlighted box on the following chart while smaller buyers “have been the heavy accumulators since late-Jan, with the smaller balances (<1 BTC) being the most aggressive (green zone).”
Glassnode said,
“In general, the market appears to be viewing Bitcoin and its role in the future economy with a somewhat renewed optimism.”
125-SMA hints at an approaching breakout
One final “interesting observation” about the price action for Bitcoin was touched on by crypto investor and pseudonymous Twitter user ‘Crypto Bull God’, who posted the following chart looking at the history of the BTC price action relative to its 125-day simple moving average (SMA).
The trader said,
“We can see how important this key level is. Once broken below, and then broken back above, we have appreciated massively in price.”
The overall cryptocurrency market cap now stands at $2.124 trillion and Bitcoin’s dominance rate is 40.9%.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
