Bitcoin Faces Uncertain Future as April Ends on Bearish Note

As Bitcoin approaches the monthly close of April, its price hovers uncertainly near ten-day lows. Prolonged selling during Wall Street trading hours has kept the cryptocurrency below crucial resistance levels. Macroeconomic and geopolitical volatility add to the challenges, raising concerns about whether Bitcoin can reverse the downtrend. While optimists suggest a ranging market that may resume the Q1 bull run, bearish sentiment remains strong, with seller interest concentrated between current levels and all-time highs. However, support areas are being closely watched in anticipation of further downside pressure. With the monthly close just days away, April is poised to become Bitcoin's worst month of 2024 thus far, underscoring the uncertain landscape and potential for a further decline.

Bitcoin Faces Uncertain Future as April Draw to a Close on Bearish Note

As the month of April draws near its end, Bitcoin (BTC) finds itself in a precarious position, with its price action sinking to ten-day lows. The largest cryptocurrency remains mired beneath substantial resistance levels following a week of sustained selling pressure during Wall Street trading hours.

Macroeconomic and geopolitical instability have further complicated the situation for Bitcoin bulls this month, leaving them grappling with formidable challenges. The current landscape presents significant hurdles, with considerable seller interest between the spot price and new all-time highs. While price discovery remains within reach, at approximately $12,000 away, such levels appear distant.

Market observers are cautiously monitoring the situation, scrutinizing key areas of support should downside pressure continue to accumulate. Optimists maintain that BTC/USD is merely traversing a range, expressing confidence that a continuation of the bull market witnessed in Q1 will materialize.

Deja vu may play a role in Bitcoin's potential resurgence this week. Less than four months after the United States, Hong Kong is poised to launch its own spot Bitcoin exchange-traded funds (ETFs).

Bitcoin At Risk of Worst Month Since November 2022

The weekly close offered scant respite to embattled Bitcoin traders as BTC/USD continued its downward trajectory into the Asia session.

Hitting lows of $61,943 on Bitstamp, the pair reached its lowest levels since April 19. The preceding week had seen relief bounces towards $65,000 repeatedly encountering selling pressure around the Wall Street open, a phenomenon that commentators attributed to U.S. automated trading algorithms.

While bears have thus far failed to keep the market below $60,000 for an extended period, April is on track to deliver losses exceeding 12%, even at current levels around $62,000.

Data from CoinGlass confirms that such an outcome would make April Bitcoin's worst-performing month since November 2022, the height of the latest bear market.

Yen Volatility Adds to FOMC Week Uncertainty

Significant macroeconomic events will continue to dominate the news this week, with the U.S. Federal Reserve's upcoming interest rate decision taking center stage.

While markets anticipate no surprises from the latest meeting of the Federal Open Market Committee (FOMC), recent macroeconomic data points have raised concerns among risk-asset bulls. Market participants fear that lower interest rates may materialize much later than initially anticipated, as indicated by estimates from CME Group's FedWatch Tool.

"We have a massive week ahead of us," summarized The Kobeissi Letter, a trading resource, in its weekly macro outlook thread. "After a month filled with hot inflation data, we will finally get the Fed's updated views."

Beyond the FOMC, the week's macroeconomic events include commentary from Fed Chair Jerome Powell on May 1, followed by jobless claims and unemployment data on May 2 and May 3, respectively.

For Bitcoin and other risk assets, however, the outlook may not be entirely bleak, unless views shift towards a significant deterioration of economic circumstances.

"Worst case scenario would be consecutively bad spells for risk assets & potentially lead to bets of economy somehow breaking apart," said Skew, a popular trader, regarding the outlook. "Probably see sweep of $50K-$46K area. Don't see that happening till there's HTF close below $58K & narrative for a breakdown."

Signs of stress are evident this week, with the U.S. experiencing yet another regional bank failure. In Japan, the yen hit its lowest levels against the dollar since 1990 during a period of flash volatility, briefly exceeding 160 before recovering.

Hong Kong Bitcoin ETFs Set to Launch

Shifting focus to Asia, the coming week marks a pivotal moment in Bitcoin's institutional adoption.

Similar to the U.S. in January, Hong Kong is preparing to launch spot Bitcoin ETFs, sparking anticipation of significant interest and potential price impact.

Citing a 2022 report from crypto exchange Huobi, Willy Woo, creator of the on-chain statistics platform Woobull, emphasized the substantial demand for spot ETF products.

"The Asian market in user count is BIGGER than the US and European markets combined," Woo noted in a post on Twitter.

House of Chimera, a blockchain research and advisory group, estimated potential inflows of $25 billion in a preliminary report on the upcoming ETF launch, citing estimates from Matrixport, a crypto financial services platform.

"The substantial capital potential might lead to increased liquidity and possibly stabilize Bitcoin prices," wrote House of Chimera on Twitter. "It also sets a precedent for other Asian markets, potentially influencing further regulatory adjustments in favor of crypto."

However, House of Chimera cautioned that investor participation from mainland China could face restrictions due to regulatory hurdles.

"While the introduction of Bitcoin ETFs in Hong Kong is a landmark development, its success and impact on the broader market will depend heavily on regulatory environments, investor sentiment, and macroeconomic factors influencing cryptocurrency valuations," concluded the group.

BTC Price Support Lines at Risk of Retest

As Bitcoin hovers near significant support levels, including $60,000 and $58,000, one trendline in particular has emerged as a potential flashpoint.

As reported by Cointelegraph, the aggregate cost basis of Bitcoin's short-term holders (STHs) has garnered the attention of analysts.

This investor cohort comprises entities holding a portion of BTC for a maximum of 155 days, embodying the speculative end of the investment spectrum.

STH realized price, currently hovering around $59,800, represents a crucial level to monitor. Throughout Bitcoin's recovery from the 2022 bear market lows, STH realized price has consistently acted as a support, with only a brief period in September 2023 breaking this pattern.

"Will it hold as support this time?" queried Philip Swift, creator of the on-chain data platform Look Into Bitcoin.

Two mid-term exponential moving averages, or EMAs, known as the "bull market support band," are also positioned to provide damage control in the event of a deeper retracement.

"As we keep consolidating, the bull market support band is catching up to price," wrote popular trader Daan Crypto Trades in his latest post on the topic. "This should offer good support if we were to touch it. Back in 2021 when we broke the 2017 all-time high, we ended up not needing it but took off before the band could catch up."

Retail Investors Return to Bitcoin

In a glimmer of optimism amidst the subdued BTC price action, retail investor interest is resurging.

Checkmate, the pseudonymous lead on-chain analyst at Glassnode, observed that wallets holding less than 100 BTC are actively increasing their exposure.

Citing data from his own platform, Checkonchain, Checkmate noted that 30-day rolling wallet balances turned positive on April 8 for the first time since mid-January.

"The Bitcoin retail holders, who are apparently degenerates who will sell on the first sign of a correction... ...appear to be stacking sats once again," he concluded. "Shrimp (<1 $BTC) are accumulating 12.2k $BTC per month as it stands."