The Bitcoin (BTCUSD) market displays a fascinating interplay between surging spot trading and retreating derivatives dominance. March saw a record-breaking $9.12 trillion in combined trading volume, with spot trading exploding by 108% to $2.94 trillion – the highest since May 2021. This surge in spot activity coincides with Bitcoin reaching new all-time highs above $73,000 and potentially signals the return of retail investors.
Furthermore, the approval process for a spot Bitcoin ETF in Australia is underway, potentially unlocking a new wave of institutional capital. This, coupled with the dwindling share of derivatives (67.8% – lowest since December 2022), suggests a potential shift in market sentiment. Derivatives are often linked to volatility and speculation, and their decline might be a positive sign for long-term Bitcoin bulls.
Technical Analysis (4-Hour Chart)
Bitcoin’s price action currently sits at a crossroads around $66,752.83. The price is nestled between the 50-SMA (blue line) and 100-SMA (orange line) above, with the 20-SMA (green line) providing support below. The recent break below the 50-SMA by the RSI (45.59) indicates a potential pullback.
However, a breakdown below the 20-SMA needs confirmation for a sustained bearish move. If this occurs, short-term traders could target the $64,548.24 support level. A break below this crucial support could trigger a steeper decline towards $61,339.58.
On the flip side, overcoming the immediate supply zone could pave the way for a bullish resurgence. A sustained breakout above this resistance could set the initial target at $71,366.64. Conquering this level would fuel the bulls’ attempt to recapture the all-time high of $73,835.57 in the near term.
Summary
Bitcoin faces a critical juncture. The surge in spot trading and the diminishing role of derivatives paint a cautiously optimistic picture. Technically, the price sits on a knife-edge, balanced between the support of the 20-SMA and the resistance of the supply zone. A confirmed breakout in either direction will dictate the short-term price trajectory.
Sources: TradingView, Trading Economics, Simply Wall Street, MarketWatch, Tech Times, CoinDesk.
Piece written by Mfanafuthi Mhlongo, Trive Financial Market Analyst
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