8 min readBitcoin rose to an 11-day high over the weekend, booking gains of over 4.5% across the past seven days. The price started the previous week at 83.5k before falling sharply to a 5-month low of 74.4k last Monday. The price then rebounded from this low, rising back above 80K to a high of 86 K on Sunday. The price holds most of those gains at the start of the week at 84.4k.
Bitcoin and many altcoins performed well. XRP rose 6%, Solana jumped 17%, and BNB gained 4%. Meanwhile, smaller tokens also performed well, with ADA increasing 7% and HBAR jumping 15%. However, Ethereum continued to sell off, dropping over 2% across the past seven days, while TON fell 10%.
The total crypto market cap increased from a low of $2.35 trillion on Monday to $2.70 trillion at the time of writing.
Liquidations ease across the week
The sharp drop to a five-month low at the start of last week saw a wave of long liquidations totaling $635.43 million, while $360.6 million in short liquidations was seen. However, long liquidations across the rest of the week were relatively muted. Shost liquidations were higher, reaching $374 million on April 9 as the price recovered.
BTC ETF posted further outflows
Institutional demand remained weak again last week. BTC ETFs experienced net outflows of $713.3 million, marking the second straight week of outflows. Breaking this down on a daily basis, Bitcoin ETFs experienced 6 consecutive days of net outflows. Persistent net outflows could mean that the recent recovery in Bitcoin could be limited.
Tit for tit trade tariffs
Global markets continued to see heightened volatility amid U.S. trade tariff headlines. The S&P500 volatility index, which is considered a fear index Wall Street breached 60 last Monday; Bitcoin plunged as did US equities, with the S&P 500 falling 6%. The spike in volatility marks the highest level since the yen-carry trade collapse in August last year. The last time this level of multiday trading volatility was seen was back in the depths of the pandemic in 2020. Despite wild fluctuations in financial markets, Bitcoin was relatively resilient in comparison.
Trump’s trade tariff headlines have been driving price action and sentiment. Fears of a full-on global trade war sent risk assets lower before President Trump announced a pause on country-specific tariffs, bringing some relief. He kept the universal tariff on global imports but also ramped up tariffs on Chinese goods on several occasions to a total of 154%. China retaliated with tariffs of 125%.
Optimism surrounding the pausing of country-specific tariffs prompted a risk on recovery midweek. Cryptocurrencies rallied, and the Nasdaq jumped over 12% in its second-best day ever.
Concerns over a potential recession in the US prevented further gains. Despite these fears, given its focus on inflation, the Federal Reserve is unlikely to take early action. The minutes of the March FOMC released last week highlighted concerns that core inflation has not eased as much as expected and warned that changes to trade policy could put more upward pressure on inflation.
While macro uncertainty has been a key concern, crypto-specific catalysts remain encouraging. One such development was the SEC announcing that Covered Stablecoins would not be considered securities. These are stablecoins backed by low-risk liquid that can quickly and easily be exchanged for USD. This excludes yielding stablecoins, which will be a future decision.
On-chain data shows LTH accumulation
Amid an uncertain macro backdrop and strong regulatory tailwinds, on-chain data points to long-term holders accumulating since February, when BTC dropped below 90K. Prior to this, long-term holders had been selling since the price breached 100 K in December.
Accumulation by long-term holders doesn’t necessarily indicate an imminent price jump; it suggests that more investors consider Bitcoin closer to a fair value, presenting a buying opportunity.
Whales driving the resilience?
While the broader market struggled, Bitcoin showed resilience, which could be down to whales driving the cycle. Large wallets holding 1k to 10k BTC have acquired 100k since March. Meanwhile, long-term holders (LTHs) command 13.6 million BTC, reflecting a 420k hike in holdings over the same period.
The net unrealized profit/loss (NUPL) for LTHs is 0.68, which suggests these holders have 68% unrealized profits. It’s worth noting that the NUPL hasn’t reached a euphoria phase, an indicator often seen at market tops. For comparison, when Bitcoin reached its record ATH of 109.5k in January, the NUPL reached 0.76.
USD weakness is a bright spot
The US dollar has fallen to its lowest level in three years as worries over the outlook for the US economy and escalating trade wars play out in the FX market. Bitcoin’s relationship with the US dollar (as measured by the US dollar index) tends to show gains after significant USD losses, although there can be a delay of several months. Could this be a repeat of 2017, which resulted in BTC/USD reaching all-time highs by the end of the year?
Global money supply sends bullish messages
On a longer-term time frame, bullish signals are coming from the global M2 money supply. The global M2 money supply, which is positively correlated to Bitcoin price action, is seeking to break out to all-time highs. Play Bella 2 has stayed at record levels for three days in a row, which could be a positive signal that risk assets will be coming in 108 days.
This is because sharp moves in global M2 often spark a similar behaviour for Bitcoin as the latency period expires. According to some analysts, this could mean a slow bleed until mid-April before the price rebounds around the beginning of May.
Bitcoin ready to break out from its falling trendline?
On the weekly chart, BTC continues to hold above the 50 SMA, which is the dynamic support that could be considered a barrier to a bear market. While the price holds above the 50-week SMA, it is not considered to be in a bear market.
Meanwhile, BTC has risen above the 50-day moving average on the daily chart and is testing the 4-month falling trendline dating back to its all-time high. While it has previously risen above this falling trendline, it has failed its retest, which is key to progressing. Above here is the 200-day SMA, a key level at 87K. Buyers need to rise above this to bring 90k into focus.
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