Bitcoin Market Analysis: April 18th-24th

It was a week of mixed fortunes for Bitcoin holders. Long term holders will have had a rollercoaster week that would have left them wondering what might have been, as the world’s most popular cryptocurrency bounced as low as $38,800 and as high as $42,870. A market that was ultimately difficult to read, there is still plenty of volatility in Bitcoin — although opportunities remain in the short term if you are on the right side of the market.

Short term holding positions are currently at a historically low level — even in the midst of potential opportunity. To the contrary, long term holding positions are at an all-time high, giving a very clear indication of market sentiment. Most of the coins on the market are now in the hands of long term holders, and short term sell offs should be coming to an end judging by the balance of proportions that we have observed.

There continues to be less Bitcoin on the exchange, and over the last 30 days the amount of Bitcoin on the exchange has fallen by 90,000. This trend continued to be exacerbated last week, and there was certainly no sign of any reversal. Below demonstrates the extent of inflows and outflows to the exchange over the previous 30 days — outflows that we are observing in the short term are part of a longer term trend of outflows overall.

As Bitcoin continues to experience withdrawals from the exchange, the percentage of supply that was last active over 1 year ago has hit a record high of 64.11%. This indicates that there are a lot of ‘stale’ Bitcoins that are not contributing to the liquidity of the market, and long term holders are sitting on their assets. This would indicate an extended outlook for some Bitcoin holders who want to ride out the current volatility wave.

From the perspective of Bitcoin’s K-line combination, the current price shocks that the market is feeling are similar to those observed at the beginning of 2019 — both of which are reflected in the shocks of interest rate hikes and balance sheet shrinking that negatively affected the market had to deal with on both occasions. A triangle pattern formed from the descending high formed in December 2021, and the rising bottom formed from January 2022. After the price broke through the downward pressure of the triangle, the pressure line became a support line, and then there was a step back that did not fall below the support line. Currently, the BTC price is around $39,700, which is also at this support line. If it does not fall below the triangle in the later period, then this step back is a small short-term correction, and there is reason to believe that Bitcoin could replicate its 2019 surge based on replicated behaviors in the market.

The main selling force of chips in the current market comes from short-term holders. This group chooses to return to the market and leave the market after the price rises above the cost of holding the currency, causing the price to continue to fluctuate and leaving it unable to increase significantly. Therefore, there is still a reasonable amount of money available in the short term, and the probability of these traders remaining in the market remains weak. On the other hand, we have also seen that long-termists are accelerating their hoarding of coins. More than 76,000 of chips in the market are in the hands of long-term coin holders, and this trend has not changed.

The market continues to be volatile into this new week, and a 24hr climb close to 4% bodes positively for the world’s most popular Bitcoin. Over the previous 90 days, Bitcoin sits over 8% higher in value — however this does not take into consideration the highs it has climbed to during this period. Peaking as high as $48k at the end of March, BTC has work to do to claw back its position of just under one month ago.

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