Bitcoin pushed back to $30,000, extending a recent bout of turmoil around the closely watched round number level. The largest token, rose as much as 3.7% on Thursday, trading at $29,195. Smaller tokens including Ether, Cardano, and Avalanche also posted gains, reflecting an overall positive sentiment across the crypto market. At present short positions are being liquidated in a market with reduced order books, driving the price of Bitcoin higher. The worldwide crypto market cap was trading near $1.22 trillion, down by 0.85% in the previous 24 hours.  The overall volume in DeFi is currently 4.96 billion, accounting for 7.53% of the entire 24-hour volume in the crypto market. The total volume of all stablecoins is now $59.39 billion, accounting for 90.07% of the total 24-hour volume of the crypto market.

Bitcoin stalled at $29,000 when Wall Street opened on April 27 as US gross domestic product (GDP) growth missed expectations. Data showed BTC/USD faltering again after sudden volatility the previous day. The largest crypto had liquidated more than $300 million in long and short positions after a flash correction on claims that Mt. Gox and U.S. price broke above $29,800 on April 26, for a total gain of 9.6% in 24 hours, to peak at $30,024 on Bitstamp. Some commentators argue that the 50% drop in shares of First Republic Bank (FRB) on April 25 was the catalyst for Bitcoin’s rally. Bitcoin bulls are likely to be satisfied with a $575 million gain if they fail to break the $30,000 resistance. However, leveraged downside bets on futures contracts recently resulted in $166 million in forced liquidations, giving the bears less room to manoeuvre. Given the bullish momentum generated by First Republic Bank’s issuance, Bitcoin bulls are well positioned for April’s $3.2 billion monthly BTC options expiration.

Ether price has remained above $1,820 for the past three weeks despite facing a 13.7% correction between April 18th and April 21st. However, a longer-term view offers a more constructive view, as Ether is up 20.8% in three months while the S&P 500 stock index has remained steady. However, according to ETH options and futures metrics, the gains were not enough to make professional investors optimistic. Deteriorating macroeconomic conditions have given crypto assets positive momentum in 2023, including the ongoing banking crisis. The decreasing total value locked (TVL) and average transaction fees above $4 on the Ethereum network have been driving bearishness from whales and market makers since February. On April 24, Ethereum decentralised applications hit 15.3 million ETH in TVL, according to data. This compares to 22.0 million ETH six months ago, a 30% drop. Ether’s struggle to go beyond $2,000 may also indicate traders’ expectations that the Federal Reserve would raise interest rates again on May 3. 

On the macro front, Recession risks increased after the US economy grew at a modest annual rate of 1.1% in the first quarter, well below the 2% expected. Meanwhile, inflation continued to weigh on the economy as the personal consumption price index rose 4.2% in the first quarter. The FRB debacle comes after the bank’s earnings report showed customer deposits fell 40.8% in the quarter as customers withdrew their funds. Notably, the bank received a $30 billion cash injection in March, but quarterly outflows topped $100 billion. On the other hand, the USA’s Federal Reserve signalled that it would raise interest rates above 5%. By raising the cost of capital, the central bank might manage to control inflation, but the unintended consequence is a weaker economy and a bear market structure for risky assets, including bitcoin.

Technical Outlook

BITCOIN

Bitcoin witnessed a sharp rally up to $31,000 from $19,550. However, the bulls failed to push the prices above the key resistance of $32,500 and the asset started making small ‘Spinning Top’ & ‘Doji’ candles that indicated indecision in trend. BTC saw some profit booking and the prices dropped to $26,942. Post this move, the asset took support at its 50 Day Moving average and is trying to move up but with low volumes. To witness a further rally BTC needs to break, close and sustain above the key resistance of $32,500.

ETH

ETH witnessed a sharp rally and surged almost by 56% from the recent bottom of $1,370 to the high of $2,146.5. Post this move, the asset started to consolidate and was trading in a range from $2,125 to $2,055. ETH gave a range breakout on the downside and has seen some correction and the prices have dropped to $1,787. The asset is trying to take support at its 50 Day Moving Average. However, ETH bulls may face major hurdles at the psychological level of $2,000 while $1,750 will act as a strong support.

BNB

BNB after making a high of $350 made a ‘Tweezer Top’ Candle that witnessed a profit booking and the prices plunged to $315.  The asset too took support at its 50-Day Moving Average and moved upwards up to $345. However, the bulls were not able to break the recent high of $350 (Tweezer Top pattern). Hence to further rally, BNB needs to break and close above $350 whereas a break below $300 will lead to further downfall.

Weekly Snapshot

USD ($)20 Apr 2328 Apr 23Previous WeekCurrent WeekCloseClose% ChangeHighLowHighLowBTC$28,246$29,4744.35%$30,602$27,856$29,996$27,071ETH$1,943$1,867-3.94%$2,137$1,906$1,963$1,792BNB$317.89$331.204.19%$350.07$315.90$344.82$316.12crypto1w – % Vol. Change (Global)BitCoin (BTC)7.95%Ethereum (ETH)-10.12%Binance Coin (BNB)-5.68%Resistance 2$37,500$2,450$1.50$380Resistance 1$32,500$2,250$1.30$350USDBTCETHMaticBNBSupport 1$27,500$1,850$1.05$300Support 2$25,000$1,700$0.75$255

Market Updates

The launch of “Robinhood Connect,” a fiat-to-crypto on-ramp featuring support for decentralised applications (DApps) and self-custody wallets, was announced at Consensus 2023 on April 27.

Circle, the creator of US Dollar Coin, has launched a mainnet protocol that lets users transfer USDC between Ethereum and Avalanche, according to an April 26 announcement.

The Hong Kong Securities Futures Commission (SFC) is reportedly set to release crypto exchange licensing guidelines next month. The incoming guidelines will provide support to crypto trading platforms that will be able to offer trading services to retail investors on June 1.

The former CFO of a special purpose acquisition company (SPAC) was sentenced to three years in prison after embezzling $5 million that was used to trade crypto assets and “meme stocks.”

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Filed under: Bitcoin - @ April 28, 2023 10:11 am