Bitcoin recovers above $30k: Is the correction canceled?
April 19, 2023 10:23 am
After BTC/USD reached the $30k level, the price moved to the consolidation phase. Subsequently, buyers managed to build up volume for a decisive bull run to $31.1k. However, when crossing the $31k level, the bulls had to face strong resistance from sellers.
As a result, the price began to decline and formed an uncertain “doji” candle, closing near the $30.4k level. The unsuccessful retest of $31k led to the activation of sellers and increased pressure on the price of Bitcoin.
The build-up of bearish volumes resulted in Bitcoin’s price breaking below the $30k level by the end of April 17. At the same time, a “bearish engulfing” pattern formed on the daily chart, which could mean the beginning of a corrective movement in the short term.
Has the bear market passed?
However, on April 18, the price of Bitcoin managed to recover above the $30k level and form a bullish engulfing pattern. This is an extremely bullish signal, indicating a weak bearish sentiment and the growing strength of the buyers.
Glassnode analysts also note that all the main on-chain metrics of the cryptocurrency indicate the completion of the main and most painful stage of the bear market. There is also an upward trend in the use of the BTC network for transactions, which strengthens the cryptocurrency’s position.
Separately, it is worth focusing on the reserve risk indicator, which measures the number of long-term holders of BTC coins. For the past year, the indicator has been below zero, but historically when the indicator exceeded 1, the price of Bitcoin has increased multiple times.
As of April 19, the reserve risk indicator is above zero, which may indicate an upcoming resumption of the upward movement. Analysts at CoinShares added positivity, noting an inflow of funds into crypto funds amounting to $114 million. The total inflow of investments in digital assets reached $345 million over the last four weeks.
Despite the overall positivity, do not forget that BTC retains its correlation with the stock market. At JPMorgan, they continue to heat up the situation, saying that the U.S. stock rally is unjustified. The inflation issue and looming recession have not been resolved, so it is too early to talk about the crisis in the crypto market being over.
BTC/USD Analysis
As we noted, Bitcoin formed a “bullish engulfing” pattern and recovered above the $30k mark. However, the trading volume of the cryptocurrency and the number of unique addresses remain low, indicating an impulse recovery growth of BTC quotes.
In the coming days, it will become clear in which direction the BTC price will move. As of April 19, a consolidation period continues, with the main level being the $30k mark. By holding this level, the chances of BTC going for a retest of $31k are higher than a correction to $28k.
Technical metrics on the daily chart indicate a local weakening of the bulls’ positions. The RSI has taken a downward direction, and the stochastic formed a bearish crossover, suggesting a further decline in price. Meanwhile, the MACD continues to implement a bearish crossover, indicating the weakness of BTC’s bullish potential.
But this isn’t to say that Bitcoin looks overheated, as the main metrics are within the bullish norm. On-chain indicators also point to the stability and consolidation of the cryptocurrency. However, BTC lacks large buyers to continue the upward movement.
Results
In the near future, the struggle for the $30k level will unfold, which will be characterized by impulsive price movements in both directions with a breakdown of key support levels. Correction should be considered as the main idea for the price movement only if BTC consolidates below $30k and continues its downward movement.
The material has been provided by InstaForex Company – www.instaforex.com
After BTC/USD reached the $30k level, the price moved to the consolidation phase. Subsequently, buyers managed to build up volume for a decisive bull run to $31.1k. However, when crossing the $31k level, the bulls had to face strong resistance from sellers.
As a result, the price began to decline and formed an uncertain “doji” candle, closing near the $30.4k level. The unsuccessful retest of $31k led to the activation of sellers and increased pressure on the price of Bitcoin.
The build-up of bearish volumes resulted in Bitcoin’s price breaking below the $30k level by the end of April 17. At the same time, a “bearish engulfing” pattern formed on the daily chart, which could mean the beginning of a corrective movement in the short term.
Has the bear market passed?
However, on April 18, the price of Bitcoin managed to recover above the $30k level and form a bullish engulfing pattern. This is an extremely bullish signal, indicating a weak bearish sentiment and the growing strength of the buyers.
Glassnode analysts also note that all the main on-chain metrics of the cryptocurrency indicate the completion of the main and most painful stage of the bear market. There is also an upward trend in the use of the BTC network for transactions, which strengthens the cryptocurrency’s position.
Separately, it is worth focusing on the reserve risk indicator, which measures the number of long-term holders of BTC coins. For the past year, the indicator has been below zero, but historically when the indicator exceeded 1, the price of Bitcoin has increased multiple times.
As of April 19, the reserve risk indicator is above zero, which may indicate an upcoming resumption of the upward movement. Analysts at CoinShares added positivity, noting an inflow of funds into crypto funds amounting to $114 million. The total inflow of investments in digital assets reached $345 million over the last four weeks.
Despite the overall positivity, do not forget that BTC retains its correlation with the stock market. At JPMorgan, they continue to heat up the situation, saying that the U.S. stock rally is unjustified. The inflation issue and looming recession have not been resolved, so it is too early to talk about the crisis in the crypto market being over.
BTC/USD Analysis
As we noted, Bitcoin formed a “bullish engulfing” pattern and recovered above the $30k mark. However, the trading volume of the cryptocurrency and the number of unique addresses remain low, indicating an impulse recovery growth of BTC quotes.
In the coming days, it will become clear in which direction the BTC price will move. As of April 19, a consolidation period continues, with the main level being the $30k mark. By holding this level, the chances of BTC going for a retest of $31k are higher than a correction to $28k.
Technical metrics on the daily chart indicate a local weakening of the bulls’ positions. The RSI has taken a downward direction, and the stochastic formed a bearish crossover, suggesting a further decline in price. Meanwhile, the MACD continues to implement a bearish crossover, indicating the weakness of BTC’s bullish potential.
But this isn’t to say that Bitcoin looks overheated, as the main metrics are within the bullish norm. On-chain indicators also point to the stability and consolidation of the cryptocurrency. However, BTC lacks large buyers to continue the upward movement.
Results
In the near future, the struggle for the $30k level will unfold, which will be characterized by impulsive price movements in both directions with a breakdown of key support levels. Correction should be considered as the main idea for the price movement only if BTC consolidates below $30k and continues its downward movement.
The material has been provided by InstaForex Company – www.instaforex.com
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