Are you expecting $40,000? Bitcoin’s Critical Level Is Already Here, New Research Says

Bitcoin (BTC) is at a “pivotal” point and is facing macro forces that could influence it for “months to come,” according to new research.

In its latest market update on April 8, the Decentrader business suite called for more attention to Bitcoin’s “annual pivot” price.

All eyes on the annual pivot

After providing support at $43,000 two new tests this month, Bitcoin broke through market sentiment, having reversed direction near $50,000.

The break below $46,200 – the open price for 2022 – was particularly hard to swallow, as it marked the ceiling of BTC price resistance since January 1.

As the lower levels are revisited, calls for $40,000 or even lower are emerging, but for Decentrader the hold zone for the bulls is already there. This comes in the form of a yearly pivot, a price level that in 2022 is around $43,500 – just at the April 8 spot price.

“Bitcoin has been thrown off the annual pivot, a level that has not been surpassed in any of the bear markets in the last 4-year cycle,” explained analyst Filbfilb.

“This, while highly likely, was a disappointment for the bulls, which were injected with hopium, having broken the main weekly support/resistance level around $43,000.”

BTC/USD chart with yearly pivots marked (screenshot). Source: Decentralizer

If the current scenario truly represents a “bear market” phase for BTC/USD, a close above the pivot, especially on longer 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 a path to significant price upside, but in the immediate term, the weekly level needs to be supported by bulls, to avoid falling back into consolidation,” Filbfilb added.

Liquidity accumulates

Beyond the pivot, the coming months look firmly tied to central bank policy as inflation bites and measures to combat it intensify.

Related: Bitcoin Plunges to April Low as US Dollar Strength Hits Highest Level Since May 2020

US Federal Reserve balance sheet cuts are likely to put pressure on equities and risk assets, analysts say, as Bitcoin loses its appeal.

Filbfilb agreed with these powerful headwinds, arguing that the Fed’s action could influence BTC price action “for months to come.”

However, the level of Bitcoin may well depend on the cash inflows. Sentiment, exemplified by derivatives funding rates, continues to favor the upside despite weakening spot price action, increasing the chances of a cascade of sell-off to the downside.

This week has already seen the longest bout of liquidation since January, according to data from on-chain monitoring resource Coinglass shows.

Crypto liquidation chart. Source: Coinglass

Liquidity both above and below the spot price means the potential for a two-way tightening remains elevated, Filbfilb wrote, with the potential upside target still north of $50,000.

The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Every investment and trading move involves risk, you should conduct your own research when making a decision.

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