Bitcoin Holds $40,000 on Easter, But Low Liquidity and Risk of “Surrender” Haunt Traders

bitcoin ( BTC ) chose compression over the Easter weekend, sparing nervous traders another dive below $40,000. BTC/USD 1 hour candle cha...

bitcoin (BTC) chose compression over the Easter weekend, sparing nervous traders another dive below $40,000.

BTC/USD 1 hour candle chart (Bitstamp). Source: Trading View

Derivatives traders take no risk

Data from Cointelegraph Markets Pro and TradingView showed that BTC/USD was operating in a narrow range with $40,700 as its ceiling on Saturday and Sunday.

The pair saw little action at the start of the holiday period, with US stock markets closed from Good Friday, allowing the crypto to avoid correlation-based volatility.

As Monday is also a non-trading day, Bitcoin has been set for four “out of hours” trading days. While that meant the correlation of his actions mattered less, there were other forces at play ready to spook sentiment.

Market liquidity remained lower than on business days and, although standard, some feared that any sudden moves would be exacerbated due to thinner order books.

Analyzing the movements of derivatives over the weekend, Deribit Insights, the research arm of the Deribit trading platform, flagged liquidity as one of the considerations influencing investor decisions in real time.

A slight zoom out of popular trader and commentator Pentoshi meanwhile provided a more wary outlook.

For him, only a recovery of levels significantly beyond the current narrow trading range on short timeframes would be enough for more bullish sentiment on what may follow for BTC/USD.

“44.5k most important point for bullish momentum currently. Resistance 42k 1D,” he abstract to Twitter followers on Saturday alongside an explanatory chart.

“The lower bias is the redistribution and another leg down. I think buyers need to step in pretty quickly.”

BTC/USD annotated chart. Source: Pentoshi/Twitter

100 days before the “surrender”?

Meanwhile, Pentoshi was not the only voice predicting long-term gain, but short-term pain for Bitcoin – a narrative that had been gaining momentum throughout 2022.

Related: Bitcoin Clings to $40,000 Support as Focus Returns to BTC Price ‘Supercycle’

Analyzing market movements, Kevin Svenson, well known on social media for his bullish sentiment on BTC, warned that the current chart behavior mimics the period just before Bitcoin’s bear market crash in late 2018.

While this event followed a long period of lower lows throughout the year, Bitcoin hit higher lows in 2022, he noted, but it wouldn’t take much for the tables. turn and the “surrender” enters.

“The difference between these higher lows and a breakdown is significant right now, so to be blindly on one side and not consider anything else is kind of silly in my opinion,” he said.

Svenson added that Bitcoin “gets there” by following a historical pattern of setting a macro low around 800 days after each block subsidy halving. The last halving – May 11, 2020 – was 706 days ago.

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