Bitcoin (BTC) begins a new week and a new quarter as if it were starting a new year – at over $46,000.
In what appears to be some serious déj vu for holders, BTC/USD is practically at the same level it was on Jan 1, 2022.
Price action has been calm – very calm, perhaps – in recent days, but on the back of declining volatility, there are signs that the market is busy deciding future direction.
From macro to on-chain, there are actually plenty of signs to keep an eye on in April, amid the backdrop of bitcoin – at least for now – maintaining its annual open price as support.
Cointelegraph takes a look at these five factors as they relate to BTC price performance in the coming week.
Inflation is met by printing fresh money
There has been much discussion about the end of the post-COVID “easy money” period and its impact on riskier assets like bitcoin.
As the United States Federal Reserve pledges to shrink its record high balance sheet and raise key rates, commentators have sounded the alarm over what could be a shockwave hitting investments in crypto.
yet, however, there is little sign That a fundamental shift is underway, while in Asia this week, it seems the opposite is true.
As Thrown light on By market commentator Holger Zaschaepitz, Japan’s central bank, the Bank of Japan (BOJ), has actually added to its balance sheet but is printing even more liquidity.
The BOJ already had the largest balance sheet relative to GDP, and this trend is only increasing, now accounting for 136% of GDP.
For Zschaepitz, this is not only a surprise, but may well be the “greatest monetary experiment in history”.
“In comparison, the ECB and the Fed look like amateurs,” he argued.
If more printing means more good times for riskier assets, meanwhile, not everyone is also convinced that long-run balance sheet cuts will continue. He claims that central banks will soon have no option but to resume liquidity injection.
“There is no government, ever, that has resisted the temptation to print money to pay its bills and placate its citizens. The government will never voluntarily go bankrupt. This is an axiom. I challenge you that You contradict me with evidence,” Arthur Hayes, former CEO of derivatives giant BitMEX, wrote in a blog post in March.
“So, if your time horizon is in years, it’s time. If you mess with the bulls, you get horns. Remember: it is not gold or bitcoin that is rising in price, it is fiat currency.” There is a decrease in the value of that in which they are priced.
Opposite view, as indicated by last week’s sign inverted yield curveThe rate hike against the now high risk of a recession in the US – a combination that should put pressure on bitcoin and stocks alike.
Spot Bull Targets $50,000
As Monday gets underway, the lack of volatility is the main thing among bitcoin traders and analysts.
Data from Cointelegraph Markets Pro and TradingView shows that some of the classic but brief excitement around the weekly close has faded within hours, with the bears still failing to take the annual open away as support.
With this, BTC/USD is in exactly the same position as it was three months ago, but short-term price signals are already being seen to continue with some calls.
Among them is popular analyst TechDev, who highlighted bitcoin’s first “volatility squeeze” since January on its 12-hour chart.
12H $BTC create instability squeeze.
From January 1st. This is during the green trend bar.
When there is a breakout arrow will indicate the direction. pic.twitter.com/5QZDl92p7f
— TechDev (@TechDev_52) 4 April 2022
TechDev used indicators including the Bollinger Bands volatility measure, which is now seeing BTC/USD surfing in the middle of the channel with an upward slant.
As Cointelegraph reported, the $50,000 mark is already likely to be attacked, which will be Bitcoin’s first this year.
Meanwhile, April itself, with much to live for in itself, has historically been a “good” month for bitcoin.
Buyers withdraw coins from exchanges in March
It’s no secret that a lot of bitcoins are leaving the exchange this year, but the latest data shows how the supply is squeezing.
According to on-chain analytics firm Glassnode, the last month saw exchange outflows unlike many others – exchanges are down the equivalent of around 100,000 BTC.
Historically, only twice in bitcoin’s lifetime has outflows crossed the 100,000 BTC mark, making it March’s high.
“Total exchange outflows of this magnitude have been seen on only a few occasions through history, most of which have been in the aftermath of the March 2020 liquidity crisis,” said Glassnode couple In Twitter comments with an annotated chart.
The implications of whether investors should recreate the downward buying behavior since the COVID-19 crash should be clear, but it could take a while to play out. In 2020, while BTC/USD rebounded after a 60% drop in days, it was not until Q4 that price performance really began to change.
Fellow analytics platform Cryptoquant, which tracks the balances of 21 major exchanges, meanwhile shows that total BTC stocks are now at their lowest level since August 1, 2018 – 2.303 million BTC.
The bearish trend in 2022 picked up momentum in March, with a total of 77,000 BTC being withdrawn to private wallets.
No problem
An unusual phenomenon has occurred when it comes to the correlation of bitcoin with altcoins – the combined open interest and volume on the altcoin derivatives markets exceeded that of bitcoin for the first time in over a year.
The move was spotted by crypto analytics platform Coinalyze, which openly suggested that the much-anticipated “altseason” could now be here.
#ALTSEASON , pic.twitter.com/O0rv3ttwMl
— coinalyze (@coinalyzetool) 31 March 2022
“This could mean that altseason, money now flows into alts,” founder Gabriel Doden told Cointelegraph in private comments.
Such a perspective chimes with data showing a considerable influx in altcoins last week, which one commenter argued is fueling increased risk appetite among investors.
In the meantime, Doden said, taking the limelight from BTC may not be a gentle one on performance per se, thanks to the way volatility has been removed.
“On the other hand, this makes BTC quite stable as it is not over leveraged; it is a good floor for BTC,” he explained.
Hash rate hits new all-time high
Hot on the heels of record difficulty for the bitcoin network, the hash rate has hit new all-time highs.
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The hash rate is now 223 exhash per second (EH/s), reflecting the confidence of miners in the long-term profitability of participating in the network, according to data resource MiningPoolStats.
While the dedicated processing power by miners is only an estimate, the hash rate has never been higher, and according to proponents, will continue to rise regardless of external attempts to “rule” bitcoin.
Francis Poliot, CEO of payment processor Bull Bitcoin, argued in a famous blog post last year about bitcoin hash rate and energy consumption, “Bitcoin mining is the most fragile system ever designed by man.”
“Any attack on bitcoin is guaranteed to make bitcoin stronger, which means higher prices, higher hash rates, and higher energy consumption.”
The topic of bitcoin versus energy remains highly controversial, with many popular figures taking pains to explain what they see as a logical fallacy – that bitcoin uses “too much”. Bitcoin doesn’t waste energy, they struggle, but only convert it into something more useful as the best money ever made.
The hash rate continues to rise regardless of the story, which underscores the basic bullish basis for investing in bitcoin.
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, so you should do your own research when making a decision.
