Bitcoin (BTC) price is still hoping traders will see a short-term downtrend, as the impact of April 18 rumors of cracking down on “unnamed financial institutions” to facilitate cryptocurrency money laundering has not yet been shaken.
Data from Cointelegraph Markets and TradingView show that since falling below the $ 51,000 level on April 18, the price of BTC has traded in a range between $ 52,500 and $ 57,500, establishing a descending pattern of lower highs and lower lows.
While regulatory concerns may have played a role in the current take-up, there have been a few other significant developments that have affected BTC’s recovery.
According to Micah Spruill, managing partner and chief investment officer at S2F Capital, a 20% to 25% drop in the bitcoin hash rate caused by mandatory power outages in China’s Xinjiang region over the weekend forced about 80% of miners to do so this area offline. “
Spruill sees this drop in hash rate combined with an all-time high in the open interest rate for Bitcoin futures as a catalyst for “the perfect scenario for heavy washout with excessive leverage”.
On what’s next for Bitcoin, Spruill pointed to a surge in bullish sentiment among analysts and traders “after much of the over-speculation in the market was mitigated by the fall in prices this month”.
“Right now, on-chain metrics are looking incredibly good as the growth of new companies joining the network accelerates, the number of user logins on major exchanges like Binance increases, and Bitcoin and Ethereum outflows remain bullish.”
The current trading range of Bitcoin can be dominated by bots
David Lifchitz, Chief Investment Officer of ExoAlpha, echoed Spruill’s perspectives, also citing regulatory concerns in the US and the announced ban on cryptocurrencies in Turkey as “the game that ignited the fires of an overfunded trading environment,” based on the ongoing Swap funding rate before and after dipping.
According to Lifchitz, Bitcoin is now back in the “twilight zone of US $ 50,000 to US $ 60,000”, with institutional Dip buyers with orders at US $ 50,000, retail FOMO – the fear of missing out – over US 60,000 -Dollar and “Trading Bots Playing” is marked table tennis in the area in between. “
Since the drawdown, Lifchitz has seen temporary support for BTC in the middle of the roughly $ 54,000- $ 55,000 range, but still believes it is “too early to say if the decline is over”.
“Without a strong catalyst it seems difficult to break above $ 60,000 right now, and a break below $ 50,000 can bring Bitcoin down to $ 30,000. Traditional markets showing signs of exhaustion can also hurt the recovery of the crypto markets. “
Ethereum price hits a new high
Bitcoin’s current downtrend has opened the door to Ether (ETH) to take the spotlight. The best-placed altcoin by market capitalization reached a new all-time high of $ 2,644 with a trading volume of $ 47.3 billion.
The rally of Ether was accompanied by a 25% price increase for Maker’s MKR, one of the oldest decentralized finance projects on the Ethereum network, which hit a new all-time high at $ 4,980.
Solana’s SOL was also a strong performer of late, rising 26% overnight to hit a new record high of $ 39.72.
The total market cap for cryptocurrencies is now $ 2.02 trillion, and Bitcoin’s dominance rate is 49.6%.