New research shows that Bitcoin (BTC), is at a pivotal point and could be influenced by macro forces for months to come.
Decentrader, a trading suite, called for greater attention to Bitcoin’s “yearly pivot” in its market update of April 8.
All eyes on the yearly pivot
Bitcoin, which has reversed its trend towards $50,000, has received $43,000 support in two retests.
It was especially difficult to swallow the move below $46,200, the opening price for 2022, because it had marked the BTC resistance ceiling since Jan. 1.
Calls for $40,000 and lower are being made as lower levels are reexamined. However, Decentrader believes that the zone where bulls can hold is already in place. This is the yearly pivot. It’s a price level that, in 2022, will be around $43,500. This price level was set by Decentrader on April 8.
Analyst Filbfilb stated that Bitcoin was rejected from the Yearly Pivot. This level has not been broken in any of the previous 4-year cycles bear markets.
This, though highly probable, was disappointing for the bulls. They had an injection with hopium and broke the weekly resistance/support level of approximately $43 thousand.
BTC/USD chart (screenshot) with yearly pivots highlighted Source: Decentrader
If the current situation is truly a “bear-market” phase for BTC/USD then a close above pivot, particularly on longer timeframes, would be not only bullish, but also historically rare.
Filbfilb said that a break above the yearly pivot would signal that Bitcoin is moving away from the 4-year cycle norm. However, for the immediate term, it is important to support the weekly level by the bulls to prevent Bitcoin from falling back into consolidation.
Liquidity stacks up
The pivot is not the only thing that matters. As inflation increases and measures to combat it intensify, the next months will be closely tied to the central bank’s policy.
Related: Bitcoin plummets to April lows, as the US dollar strength reaches its highest level since May 2020
Analysts agree that the United States Federal Reserve’s reductions in its balance sheet are likely to put pressure on stocks and other risk assets. Bitcoin is also at risk.
Filbfilb agreed with these powerful headwinds and argued that the Fed’s actions could have an impact on BTC price action for months to come.
However, how low Bitcoin can go will depend on the liquidity grabs. The derivatives funding rates continue to show a positive sentiment, which may be reflected in the potential liquidation cascade.
According to Coinglass, this week saw the longest long liquidation episode since January.
Chart of crypto liquidations. Source: Coinglass
Filbfilb stated that liquidity above and below spot prices means that there is still a possibility of a squeeze in either direction. The potential upside target for $50,000 is also possible.
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