Bitcoin (BTC) got busy testing $30,000 as new support at the April 11 Wall Street open after hitting new ten-month highs.
BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView
$30,000 surge decimates liquidity
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD coming down from an overnight peak near $30,500.
The pair had spent most of the day bouncing from the $30,000 mark after finally passing it in a short squeeze weeks in the making.
Major misgivings from some market participants accompanied the move, with fears centering on a potential correction to $25,000 or even lower.
Takes became more optimistic on longer timeframes, however. The $30,000 push, for instance, cemented popular trader and analyst Rekt Capital’s conviction that Bitcoin had abandoned a bearish double top formation from Q1.
“The signs for distortion of the BTC Double Top were there,” he wrote in a Twitter thread update.
“$BTC has invalidated the Double Top and confirmed a breakout to new Yearly Highs.”
BTC/USD annotated chart. Source: Rekt Capital/ Twitter
Continuing, Rekt Capital spelled out the conditions required to be met on daily timeframes to continue the bullish momentum.
For #BTC to continue being bullish beyond this point, price needs to:
• Daily Candle Close above the Higher High (black)
• Dip to turn it into new support$BTC is well-positioned for a Daily Close above the Higher High at this time#Crypto #Bitcoin pic.twitter.com/gm9g9EQyP2
— Rekt Capital (@rektcapital) April 11, 2023
Related: Crypto audits and bug bounties are broken: Here’s how to fix them
Analyzing the composition of the Binance order book on the day, meanwhile, monitoring resource Material Indicators suggested that the odds of continued upside remained good.
“After the push above $30k, BTC liquidity is diffused in both directions,” it explained in part of commentary.
“There are no massive buy/sell walls, in fact the so called walls that appear on FireCharts are rather thin. Bullish momentum is growing so we could see a push higher.”
BTC/USD order book data (Binance). Source: Material Indicators/Twitter
CPI lurks as volatility catalyst
The general mood was mixed with apprehension thanks to macro catalysts waiting in the wings for the rest of the week.
Related: Bitcoin ‘faces headwinds’ as US money supply drops most since 1950s
April 12 will see the United States Consumer Price Index (CPI) print for March released, with Producer Price Inflation (PPI) following a day later.
With both events known to induce risk asset volatility, Material Indicators acknowledged that an “explosive move” may result for Bitcoin this time around.
“Wed CPI and Thu PPI Reports could trigger a more explosive move. If numbers are hot, expecting a correction,” it added.
Markets commentator Holger Zschaepitz nonetheless flagged the highest levels of shorting the S&P 500 since 2011 ahead of the CPI release.
Hedge Funds boost S&P shorts to decade high before CPI, earnings. Net short positions at levels not seen since 2011. Goldman’s clients cut tech longs at fastest pace in 15 months. https://t.co/K9CfM04siA pic.twitter.com/PD9NUOEqV6
— Holger Zschaepitz (@Schuldensuehner) April 10, 2023
As Cointelegraph reported, the correlation in volatility between Bitcoin and equities has cooled significantly.
Analytics account Tedtalksmacro added that “traders are likely to risk-off into the event” when it comes to CPI.
“Risk that a hot print forces market-wide repricing,” part of a post read as Bitcoin passed $30,000, noting for BTC/USD that there were “signs of froth up here, perps leading price higher and plenty of large spot offers have been lifted.”
Bitcoin now trading north of $30k.
If you’ve rode the wave so far, it’s probably a good time to think about de-risking, although I believe that true resistance is somewhere around $34k…
Headwinds:
– US CPI (tomorrow); traders are likely to risk-off into the event. Risk that a… https://t.co/T6FYz9c2Rs
— tedtalksmacro (@tedtalksmacro) April 11, 2023
The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Source: https://cointelegraph.com/news/bitcoin-double-top-invalidated-amid-fear-cpi-may-fuel-macro-comedown
