Bitcoin Market Analysis: April 11th-17th

The market was difficult for Bitcoin last week, continuing on the same trajectory as observed the week previous. Starting at just above $43k, the world’s most popular cryptocurrency spent most of the week then hovering around the $40k mark after a relatively dramatic fall early on Monday. Aside from a brief period between Wednesday and Thursday evening at $41k, opportunities were low for short term holders and day traders to make any significant returns.

While becoming accustomed to operating in uncertain and volatile markets since the beginning of 2022, Bitcoin will still be longing for a period of steady growth — something which hasn’t materialized yet this year. Falling beneath the $40k milestone figure last week means that attentions in the market will have no doubt turned from setting new price records this year to correcting what it considers to be the ‘true’ value of Bitcoin in the short to mid term.

The general theme of the week for the Bitcoin market was outflows. A trend since the beginning of March, the BTC Exchange Balance continued to fall last week, with 34,000 withdrawn overall. This was a significant acceleration of withdrawals also, even in context.

This is further demonstrated by outflows from the popular asset exchange Coinbase Pro. As the remaining Bitcoin in the exchange gradually decreases, the Bitcoin available for trading in the market gradually starts to become scarce — meaning that a large amount of Bitcoin has entered a low liquidity or illiquid state.

Illiquid supply totals over 14,558,000, and is trending upwards at an ever increasing rate, with illiquid supply to all liquidity currently over 76.6%. In the long term, this will further weaken the market sell-off in Bitcoin, implying there is less supply in the market overall.

Furthermore, when observing the increase in the number of positions in all global Bitcoin funds from January to April 2022, we see that April already has a general trend of being a selling month. Even a dramatic turnaround in this trend won’t take the month anywhere near close to what we saw in March at this point, which is a real indicator of market sentiment right now.

What we are observing here, as discussed above, is reflective of overall market sentiment, which is undoubtedly bearish. With cryptocurrencies growing in popularity in more recent times, it certainly wasn’t part of the plan that markets such as Bitcoin would be focusing on short term recovery 4 months in to the calendar year, trading almost $20k below its peak market price from October 2021.

With that said, given the strongly bullish on-chain fundamentals, it would be more than surprising to see any further significant drops, such as Bitcoin price falling to $30,000 or even below $20,000, for example. There are clear short term hurdles for the Bitcoin market to clear, however in the long term Bitcoin does have a tendency to bounce back — although the extent of this bearish period was not part of the plan.

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ZB.com is the world’s most secure digital trading platform, facilitating the trade and management of digital assets from all corners of the globe.

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