Key Points
- Bitcoin (BTC) is striving to recover from a 15% price dip, with geopolitics being a significant focus.
- Altcoins have taken the brunt of the market reaction to tensions between Israel and Iran, while Bitcoin has managed to maintain $60,000 support.
Bitcoin is starting the week with an uphill battle to regain ground after a significant price dip of 15%.
The weekend saw a significant impact on the crypto market, but Bitcoin is already showing signs of recovery.
Geopolitical Sensitivity
The coming week’s focus is on geopolitical sensitivity, with recent Middle East events being compared to the cross-market crash of March 2020 due to COVID-19.
Altcoins have been significantly affected by the market’s snap reaction to hostilities between Israel and Iran, but Bitcoin has managed to hold on to $60,000 support.
However, leverage saw a comprehensive flush, and even with Bitcoin, 30% of open interest vanished instantly.
Volatility and Halving
While volatility is clearly visible, Bitcoin is just days away from its next block subsidy halving.
This sets the stage for continued volatile conditions as Bitcoin’s price action becomes increasingly unpredictable.
The weekend was a nightmare for the crypto market due to fresh geopolitical instability in the Middle East.
As the only free-trading markets open 24/7, crypto saw immediate losses.
Bitcoin and altcoins sold off rapidly, with Bitcoin seeing lows of just above $61,000.
Altcoins fared much worse, some losing 50% of their value before slowly climbing back up.
Bitcoin’s dominance over the combined crypto market cap hit three-year highs last week.
Despite the surprise at the extent of the moves, popular analyst Matthew Hyland suggested that the signs of a flash correction were already present.
Order Book Data and Liquidity Shifts
Analyzing current order book data, popular trader and analyst Credible Crypto eyed ongoing shifts in liquidity being placed and pulled on the largest exchange, Binance.
“Spot still trading at a premium- everything else still looking very healthy,” he summarized.
Data from monitoring resource CoinGlass covered the combined liquidity picture across exchanges, showing the largest block of asks at $68,500 as of April 15.
Fellow trader Jelle added that “Bitcoin still holds above its previous cycle highs. Everything is going to be okay.”
The latest weekly close on BTC/USD was the pair’s lowest since the beginning of March.
The coming week holds a typical mix of United States macroeconomic data and commentary from senior Federal Reserve officials.
However, the atmosphere is compounded by events in the Middle East, potentially leaving already wary risk assets open to additional sensitivity.
Jobless claims form the key data print for the week; these are due on April 18, while Powell will speak on April 16.
Inflation remains an important consideration for traders, who have repeatedly priced out the odds of interest rate cuts coming sooner rather than later this year.
The latest estimates see the odds of a 25-basis-point rate cut at the Fed’s July meeting at 43%, with September at 45%.
Miners and the Halving
The weekend’s market volatility has almost overshadowed Bitcoin’s imminent block subsidy halving.
With just four days to go, traders’ attention remains focused on price rather than the seminal network event.
Miners are at the forefront of the changes, with their revenue streams being reshaped in an instant as “new” bitcoins per mined block drop by 50% to 3.125 BTC.
Research sees miners upping selling pressure around the event.
However, the latest data shows the BTC balance in known miner wallets staying mostly flat since the end of March.
Revenues, with fees included, meanwhile continue to circle familiar levels.
ETFs and Market Sentiment
Regulators in Hong Kong have approved Bitcoin and Ethereum (ETH) ETFs for trading, reports say — something which is getting observers excited for future Chinese participation.
Operators including China Asset Management, Harvest Global Investments, and Bosera Asset Management will be launching spot crypto products.
The U.S. ETFs are facing a broad slowdown in inflows after a rapid acceleration in March accompanied the ascent to BTC price all-time highs.
The U.S. products nonetheless remain the most successful ETF launches in history, with the two largest offerings from BlackRock and Fidelity Investments seeing net inflows every day since their debut.
In a signal to those hoping for a sustained crypto price recovery, sentiment remains firmly “greedy.”
Even the weekend wipeout failed to induce significant cold feet into investors’ mindset.
Fear & Greed reached 72/100, and while this marks its lowest in around ten days, it is far from a capitulatory move.
At the time of writing, the Index is now once again rising, hitting 74/100 to near its “extreme greed” zone.
