Bitcoin: a very disturbing reintegration

After briefly surpassing the $ 45,000 capital level, Bitcoin falls violently back into its range and dips below $ 40,000. Simple jolt to get buyers out or real danger? Let’s try to decipher the latest movements in this new article!

This technical analysis is offered in collaboration with the Coin Trading and its algorithmic trading solution finally accessible to individuals.

Technical analysis

Bitcoin

Bitcoin, newspaper

Let’s start with a price action analysis (often called Price action). We can easily see that the $ 44,500 level is the main one resistence very visible! We spent it briefly for a few days, but us reinstated very quickly.

Then, at the level of supportwe just briefly got to the level of Daily demand. This is where buyers need to trigger a new bullish move in order to avoid making a lower bottom than the previous one.

Analyze the MA Daily technique

After looking at the chart with no indicators, I like to turn on moving averages. I find them particularly relevant in H4 and everyday on my part. Here we have a superb confluence of moving averages at the $ 44,500 level with a horizontal level, which boosts my confidence that the $ 44,500 level is the crucial level to break through.

Technical analysis with volumetric profile

I can finally activate mine volumetric profile. It is particularly interesting because the levels at which the volume is concentrated are often levels that tend to react. So, we can see that the rejection we had at $ 48,200 was a level where there was a lot of volume. So it’s quite logical that we have a rejection here. We just got back to $ 40,000 and that level seems to hold up for now, there is a lot of volume residing here as well. To find out more about traditional markets, I invite you to follow our macro point!

NASDAQ

Nasdaq daily
NASDAQ, newspaper

Very important to watch in cryptocurrency trading, the NASDAQ. We are, on Bitcoin, quite often related to NASDAQ and altcoins are themselves related to Bitcoin.

The level I thought was worth keeping was $ 14,500, which gave us a confluence of pivot points and multiple moving averages. This level has been lost and should now be particularly difficult to overcome, due to this confluence of multiple elements.

Orderflow, volume analysis, financial data.

Weekly volume profile

Bitcoin weekly volume profile
Weekly volume profile

We had already noticed this in my last Bitcoin article, but there is a volume gap between $ 52,000 and $ 55,000. These gaps are caused by high momentum candles, which do not leave the possibility of fulfilling all orders. They generally tend to fill up over time.

Example of a high momentum candle

Open interest

Particularly low open interest!
Source: Coinalyze

Open interest represents the total amount placed on the perpetual markets of an asset. If I enter the purchase of $ 1000 of BTC on the perpetual markets, the Open Interest increases by $ 1000. If I close my position, the Open Interest drops by $ 1000.

Therefore, it allows you to observe whether participants are overexposed to leverage, as these contracts are generally used to trade with leverage.

In the event of a big move by Bitcoin, those overexposed with leverage can create a liquidation cascade. This is what specifically happened on this example which I have already used earlier in the article.

Example of a high momentum candle

These high momentum candles noted here are caused by traders with excessive leverage. We can confirm this with the Open Interest which falls drastically on these candles.

Example of a high momentum candle caused by overexposed players

To be a little more precise: the Open Interest data of the ECM (Chigago Mercantil Exchange) show us that institutional investors appear to be gradually withdrawing from their Bitcoin positions.

ECM open interest data

Options

Option data
Source: CoinOptionsTrack

We can see that there are over 41,000 bitcoins that will expire via option contracts on April 29th.

This deadline is monitored by a large number of operators. the maximum price of pain is the price at which there will be a maximum loser at expiration, it is currently at $ 42,000 but could still change by April 29th.

Often, when contracts expire, the price approaches this maximum bad debt price. It is therefore relatively important to monitor it regularly!

Data on the chain

Net position change on the stock exchange

Glassnode, Bitcoin movement out of exchanges!
Stakeholders seem to accumulate …

A fact that I always appreciate: the amount of bitcoins entering and leaving the exchanges. I interpret it as follows:

  • If a lot of bitcoins go out of business, the trend is accumulation. Bitcoins that are not on the stock exchange cannot be sold for fiat currency: reduction of selling pressure.
  • Conversely, if many bitcoins enter exchanges, it is often ahead of the sale, or at least preparing for a sale. The sales pressure increased.

We can see that the trend has largely been for accumulation from trading, just like the lows we have seen over the past couple of years.

Focus on important portfolios

Moving average of the largest Bitcoin wallets!

Here we have a graph that represents two things: Bitcoin’s price is in black and the green line is an average of the number of wallets that hold more than 1000 or more than 10,000 bitcoins.

These portfolios are important to monitor – they are the ones that move the market significantly. A market order to sell 1000 bitcoins can be heard pretty quickly.

Therefore, we can see that this average increased dramatically from February 28 to March 8.

I take this data with a lot of tweezers, because it is normal for funds from exchange portfolios (Binance, Kucoin, FTX for example) to be replaced, which can distort the interpretation that can be made of them.

Net realized gains and losses

Profits and Losses Realized!

This chart shows the profits and losses made on Bitcoin. We can see that some profits have been taken recently, especially on this last bullish leg above $ 45,000.

I also note that, unlike the May 2021 drop, there is a big move missing that would really scare traders.

We have not reached the loss levels we had achieved in this period. It is important to have a bearish leg that brings out the most fragile in order to build a new bullish move of magnitude.

Summary of key levels.

  • $ 44,500 – The horizontal level, volume gap, and moving averages come together. The main area for shoppers to go through.
  • $ 48,000: Lots of volume here, we’ve already turned down this level.
  • $ 38,000 – $ 39,000: daily demand zone, a lot of volume: main zone to maintain.

Conclusion

It is very difficult to tame the price of Bitcoin in the current economic and geopolitical context. The on-chain data gives us some things that are bullish, but traditional markets could spoil the party. We will have to be alert and beware of events: a ceasefire in the conflict between Ukraine and Russia could be a catalyst for easing selling pressure on traditional markets and, by extension, Bitcoin. As I always say: manage your riskand everything will be fine!

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