Bitcoin Loses Weekly Support as Prices Slide closer to $40,000

4 min readApr 11, 2022

Bitcoin dropped below key weekly levels as buyers failed to show up over the weekend. The Bitcoin Miami bull might have some explaining to do.

Various headwinds have enabled risk-assets to be sold off as btc follows the US stock market the same way altcoins tend to follow bitcoin. Oh the irony.

In any case, let’s dig in.

Dear readers,

The purpose of this newsletter analysis is to provide context to current events and cryptocurrency markets. It is released every Monday and Wednesday. I am not perfect and this is not a science — nor is this newsletter a signals service. While I cannot promise perfection I do my best to be honest and transparent.

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Bitcoin Exchange Outflows Accelerate as Canada’s Purpose ETF sees 5,500 BTC enter its Coffers

Cryptocurrency exchanges continue to see significant bitcoin withdrawals, with exchange coin reserves reaching multi-year lows. At the same time, Canadian Bitcoin ETF products have witnessed a surge in holdings in the first quarter of 2022.

Read the full article here!

Technically speaking

Bitcoin Ends Week with a Bearish Outlook

Bitcoin/Dollar exchanges hands at $41,500, down 11.2% week-on-week. The pair failed to reclaim the key weekly level of $45,000 on the close, indicating that sellers are in control.

However, price-action has been accompanied by a period of negative funding, suggesting that downside is limited and that BTC/USD is due for a relief rally. If and when it materialises, the rally should be viewed within a bearish context until proven otherwise (i.e. until $45,000 is reclaimed).

Given this context, the $36,600 level mentioned in the previous newsletter only makes sense in so far as BTC/USD begins to price-in this weekly bear trend within oversold conditions. In my view, it’s unlikely for this level to be hit before a relief rally takes place. The daily stochastic RSI is currently slammed in oversold territory, indicating that buyers will probably step in any day now.

H4 Reversal Setup Appears

BTC/USD got rejected off the 200-EMA on the H4 chart. The wick is particularly nasty on Bitfinex where some whale probably fat-fingered a market buy order.

Multiple divergences have appeared on the H4 too, with both On-Balance Volumes (OBV) and the Relative Strength Index (RSI) printing triple bullish divergences on this timeframe. Whether bulls will seize the opportunity is another question, and may offer insight as to why the Bitcoin Miami bull has no balls.

A falling wedge on the H4 time-frame is also clearly visible, and may yet provide support. So far, high-time-frame support has caved, however. A drop to $40,000 — $39,000 could be in the cards. This would be another reset to the Q1 trend which resulted in a series of higher-lows that led to the run up to $48,000. Losing this trend opens the door to $36,600.

Headwinds from traditional finance are afoot too, with FED rhetoric on monetary tightening (50 basis points) spooking markets and enabling risk-off sentiment to prevail. It’s kind of ironic for Bitcoin to follow the NDAQ & SPX the same way Altcoins follow BTC/USD. Almost makes you wonder just how far certain characters have their head firmly planted up their own buttocks.

As a side note, it’s becoming clearer that bitcoin is awash with fiat plebs who have not made the mental switch necessary to hold Bitcoin through thick and thin. The proliferation of nonsensical NFTs — which aren’t even vaporwave — and over speculation on coins based solely on whether they can pump 10x or a 100x is not a good sign either. Crypto liquidations would only surge higher until that cohort of market participants are washed out (in relative terms) in my view.

Some kind of a market recovery is probable regardless, in my estimation. But this should be read within the bearish context just described until the market indicates otherwise. It is what it is, unfortunately. But it’s by no means the end of the cycle. The pendulum swings both ways after all.

*Please note this analysis was updated shortly after release. Twitter post here*

p.s. This is my opinion. It is not financial advice.

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