Bitcoin (BTC) is starting a new week and a new quarter as if it was starting a new year just over $46,000.
In what may seem like a big déjà vu to traders, BTC/USD is practically at the same level as January 1, 2022.
The price has been quiet in recent days – perhaps very quiet – but the declining volatility is masking signs that the market is busy defining its future direction.
Indeed, from the macro to the chain, there are several signs to watch out for in April as Bitcoin – at least for the time being – maintains its yearly opening price at support.
Cointelegraph looks at five of these factors when it comes to BTC price action in the coming week.
Inflation meets new financial pressures
There has been a lot of talk about the end of the “simple money” period after COVID and its impact on risky assets like bitcoin.
While the US Federal Reserve has promised to cut its record balance sheet and continue raising key interest rates, commentators have raised the alarm about what could be a shock wave for crypto investment.
But so far, there are little indications that there will be a fundamental shift, while in Asia this week the opposite appears to be true.
As noted by market observer Holger Zerzebitz, the Bank of Japan (BoJ) increased its balance sheet, increasing liquidity.
The Bank of Japan already had the largest balance sheet in terms of GDP and this trend is only increasing, now it is 136% of GDP.
For Zschepitz, this is not only a surprise, but it may also be the “biggest critical experiment in history”.
“The European Central Bank and the Federal Reserve look like amateurs by comparison,” he said.
Annotated balance sheet of the Central Bank. Source: Holger Zschaepitz / Twitter
If more printing means more good times for risky assets, not everyone will be convinced that the long-awaited balance sheet pull will continue. They claim that the central banks will soon have no choice but to resume their liquidity support.
Arthur Hayes, former chief executive of derivatives, wrote: “No government has ever resisted the temptation to print money to pay bills and appease people. And government will never go bankrupt voluntarily. That’s self-evident. I urge you to discredit the evidence.” Giant BitMEX, in a blog post in March.
“So if your time horizon is this year, it’s time. If you rotate with a bull, you get horns. Remember: the price of gold or bitcoin does not go up, but the value of the fiat currency in which it is valued goes down.”
The opposite trend, as evidenced by last week’s yield curve inversion, is raising interest rates against the current high risks of a US recession – a combination that will pressure both bitcoin and stocks.
Instant Bulls aim at $50,000
The lack of volatility was the main point of discussion among bitcoin traders and analysts in early April 4.
As data from Cointelegraph Markets Pro and TradingView show, some of the classic but short-lived weekend buzz faded in a matter of hours, with the bears still unable to use the yearly opening as support.
BTC/USD weekly candlestick chart (bit stamp). Source: Trading View
Meanwhile, BTC/USD is in exactly the same place as it was three months ago, but the short-term price signals are already calling for continued growth.
Among them is a popular TechDev analyst who noticed the first “volatility pressure” in Bitcoin since January, and played on the 12-hour chart.
TechDev used indicators, including the Bollinger Bands volatility indicator, which now shows BTC/USD moving sideways in the middle of the channel.
As Cointelegraph recently reported, the chances of an attack on the $50,000 mark already exist, which would be the first attack on Bitcoin this year.
Meanwhile, April itself has a lot to look forward to – the month itself has historically been a “good” month for bitcoin.
Buyers withdraw coins from exchanges in March
It’s no secret that many bitcoins have left exchanges this year, but the latest data shows how supply is shrinking.
The last month saw an outflow from the stock markets, unlike many others, where the stock market plunged nearly 100,000 BTC, according to research firm Glassnode.
Historically, there have been only two instances in Bitcoin’s lifetime where outflows crossed the 100,000 BTC mark, making March one of the highest levels ever.
“Cumulative outflows of this size have only been seen a few times throughout history, and most of them have occurred since the March 2020 liquidity crunch,” Glassnode added in a Twitter comment, along with an illustration.