Bitcoin Market Report: 12 April 2019
It’s been a turbulent week for the bitcoin market, bullish momentum appears to be fading.
Ten days ago, a mysetrious buyer spent around $100 million on bitcoin, buying around 20,000 BTC on three major fiat exchanges and pushing the price up almost $1,000 in the process. Traders as a whole took this as an extremely bullish development, taking out the previous lower high around $4,200 and breaking through several resistance levels to top $5,000. At that point, indicators on every timeframe showed BTC was overbought, but after a pause it pushed higher – almost touching $5,500 on Wednesday this week.
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While this did indeed break the structure of the bear market, there are reasons for caution. That 20,000 BTC order was suspicious; the trader would have lost a lot of money in slippage, indicating that acquiring coins was not his only purpose. He spent millions of dollars to send a signal to the market. We just don’t know the ultimate meaning of that signal.
Meanwhile other major indicators were showing bitcoin was badly overbought and due a correction. The Cryptocurrency Fear and Greed Index was above 70, its highest value since February 2018. And NVT Signal was also above 150, well into its overbought zone.
A correction from the high back to $5,000 was all but inevitable under these circumstances. The question now is whether last week’s gains will hold, or whether traders will lose confidence and BTC will drop back into the mid-to-low $4k range once again – raising questions about whether the bear market has ended after all.
We can expect some resistance in the $4,800–$5k zone, but after that there is relatively little down to $4,200 – bitcoin’s breakout point and the lower high it breached at the start of the month.
Uncertainty is inherent in a market, and especially in the short term, so there are no guarantees. But bitcoin is at an extremely meaningful point in the market cycle. The next movement could send another strong message that the bear market is truly over, if price retests and holds support; alternatively, it could erase its recent gains and plunge the market back into panic-selling and despair. Heavy falls on the alts show that traders are exiting to bitcoin with one of those scenarios in mind – but we won’t know which until it happens.