Bitcoin bounces to near $41K after crypto sentiment gauge hits 6-week lows

Market Analysis

Bitcoin (BTC) saw a welcome break from downside at the Wall Street open on April 13 as United States equities opened in the green.

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

Sub-$39,000 BTC price target remains

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD climbing to local highs of $40,965 on Bitstamp as trading began on April 13, its best in over 24 hours.

After a frustrating rangebound period, volatility to the upside was a relief for support levels previously in danger of collapsing.

Traders, however, were not overly optimistic, having eyed lower entry levels for a potential long position.

As Cointelegraph reported, popular trader Crypto Ed was also risk-off in tone on the day, previously forecasting a relief bounce before a deeper correction under $39,000.

“I expect a move, let’s say, towards $41,000 and then I think most likely we do get that extra leg to the downside,” he said in a YouTube update published subsequently. 

Ed added that the scenario would be invalidated should BTC/USD manage to hold above the $40,500 mark. At the time of writing, the pair was continuing to move towards the $41,000 target.

Macro triggers remained familiar, these coming in the form of inflation after April 12’s U.S. Consumer Price Index (CPI) readout of 8.5% for March, its highest since 1981. In the United Kingdom, the CPI quickened to 7%, a 30-year high, according to figures from the Office for National Statistics.

Sentiment on the move from 6-week lows

Traders seemed prepared for the bounce, with data showing modest position liquidations for both longs and shorts over the past 24 hours.

Related: BTC stocks correlation ‘not what we want’ — 5 things to know in Bitcoin this week

The dip below $40,000 had conversely cost market participants dearly, with liquidations passing $500 million fueled by longs.

Crypto liquidations chart. Source: Coinglass

At the same time, sentiment was rising, as calculated by the Crypto Fear & Greed Index, this having reached 20/100 or “extreme fear” on April 12. Such a low sentiment score was last recorded in late February.

Crypto Fear & Greed Index (screenshot). Source: Alternative.me

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Articles You May Like

Where Is The Ethereum Price Headed Next After Clearing This Resistance
BTC price holds $16K as analyst says Bitcoin fundamentals ‘unchanged’
Block Earner sued over crypto-yield products, CEO calls for clarity
FTX reportedly used Alameda’s bank accounts to process customer funds
Bitcoin exchanges see 180K BTC supply decrease amid Mt. Gox BTC sales