Is Bitcoin Price Optimism Fading After Crypto Market's Rocky April?

bitcoin ( BTC ) peaked at around $46,000 on April 4 before falling back to $38,000, causing much frustration among crypto traders who hav...

bitcoin (BTC) peaked at around $46,000 on April 4 before falling back to $38,000, causing much frustration among crypto traders who have been so accustomed to unreal market returns over the past two years following the March 2020 crash. .

February and March showed signs of recovery, especially after the sharp declines in December and January. But the question is why the bullish momentum suddenly stopped?

S&P 500 continued correlation

The correlation between crypto and stocks, especially Bitcoin and the S&P 500, continues to exist and is likely to last until mid-May when Jerome Powell and the US Federal Reserve announce a likely 0.5% rate hike. to fight inflation.

However, this does not necessarily mean that Bitcoin will show further declines. Suppose cryptocurrencies continue to imitate the movement of stock prices and not the other way around. If so, many believe that although the S&P 500 has been falling lately, rate hike fears would likely have been anchored before the Fed’s scheduled meeting.

Bitcoin Whale Purge, Tether Whale Rise

There are two tiers of must-have crypto data platform that Santiment constantly examines to analyze future price action across the entire market: the supply held by 100-10,000 BTC addresses and the supply held by addresses from 100,000 to 10,000,000 Tether (USDT).

Over the past two months, BTC whales in this key group have lost 0.6% of their holdings. Meanwhile, the key USDT group actually added 1.8% of the supply of the first stablecoin.

Although large whale addresses have emptied their supply of BTC, evidence shows that prices generally increase when there are more addresses with 10-100,000 BTC. Addresses holding about $3.8 million in total have been created or returned to the BTC network since the Russian-Ukrainian war broke out in late February.

Traders deceived by falling buying opportunity

Santiment found that a reliable mainstream crowd trend was incorrect the vast majority of the time when she believed a price event was happening too evenly. Even with the “buy the dip” narrative at full tilt, the chart below shows that prices have not rebounded as traders had hoped. Ironically, it is often when the crowd gives up any tendency to spot the bottom that prices begin to rally.

Ether whales are starting to show interest

Aether of Santiment (ETH) The measurement of the number of whale transactions indicates that levels had begun to rise at the same rate of more than 1,400 per day seen last week when the decline was quickly recovered. High-value trades over $100,000 would likely indicate that major stakeholders are starting to circulate their coins at bullish levels.

Traders are short on approach in May

Foreign exchange financing rates are another indicator of price direction. When there are excessive longs (bets in favor of higher prices) like what was seen just after the all-time high in November, prices tend to correct. However, the opposite trend seems to be happening right now.

Significant short funding rates are evident on several exchanges, indicating that the FUD surrounding the crypto markets is apparent. Typically, when BTC and altcoins are shorted in tandem to this degree, there is a significantly higher likelihood of prices rising to force liquidations against those betting against rising crypto prices.