Bitcoin (BTC) and the cryptocurrency market lost momentum once again after a hard sell-off yesterday. The leading cryptocurrency failed to hold above $40,000 and is currently trading at $39,122, down 5% and a market cap of $730 billion.
According to popular cryptocurrency analyst Lark Davis, BTC is gaining support at these levels. Bitcoin price is down 10 percent on the weekly charts, while it corrected more than 20 percent on the monthly charts. Bitcoin is highly correlated with the S&P 500 and thus remains vulnerable to volatility in the US stock market. However, on-chain data provider Santiment notes that social interest in buying Bitcoin dips is growing rapidly.
"Social interest in the 'buy bottom' call has skyrocketed after the recent crash in the cryptocurrency market. The SP500 correlation is a hurdle for Bitcoin."
The overall cryptocurrency market landscape is quite similar to that of Bitcoin. The world's second-largest cryptocurrency, Ethereum (ETH), also lost 5.30% and is currently trading at $2,858 with a market cap of $342 billion. ETH price action shows an almost similar chart to BTC. But Ethereum whales are buying from the bottom. Popular crypto market analyst Ali Martinez says:
“Ethereum whales are on a buying spree. Data from Glassnode shows that since March 14, about 44 new addresses with balances of 10,000 ETH or more have been created. Each of these whales has more than 30 million ETH.”
Bitcoin shows stagnant price movements in the $35,000 to $45,000 range. So this could be just another temporary price increase and nothing definitive can be said at this time. However, there are some interesting developments ahead for Bitcoin investors this week. Australia is gearing up to receive its first spot Bitcoin ETF this week, which will be listed on the CBOE stock exchange on April 27. Also, according to market forecasts, this could see net inflows of $1 billion and above.
Another positive trigger for Bitcoin could be the very rapid growth of the illiquid BTC supply. Citing data from Glassnode, analysts at Blockforce Capital report that a "large" number of BTC has been moved from exchanges. These Bitcoins go to cold wallets. Glassnode analysts highlighted:
“We have seen this level of exit from exchanges only four times since the start of 2018. Three of these examples were associated with a sharp upward move in price very soon.”