Bitcoin price holds $40,000 over Easter but tight liquidity and ‘capitulation’ risk haunt traders

Bitcoin (BTC) Price Opted for Compression Over Easter Weekendsparing nervous traders a further drop below $40,000.

1-hour candlestick chart for the BTC/USD pair (Bitstamp). Source: TradingView

Derivatives traders take no risks

Data from Cointelegraph Markets Pro and TradingView showed the BTC/USD pair acting in a tight range with $40,700 as the upper top on Saturday and Sunday..

The pair showed little action at the start of the holiday period, with US stock markets inactive since Good Friday, allowing cryptos to avoid correlation-based volatility.

As Monday is also a non-business day, bitcoin price had four “after hours” trading days. While that meant the correlation of his actions mattered less, there were other forces at play ready to scare sentiment.

Market liquidity remained lower than on business days and, although it is normal, some feared that any sudden moves could be exacerbated as a result of declining order books.

Analyzing derivatives movements over the weekend, Deribit Insights, the research arm of the trading platform Deribit noted liquidity as one of the considerations influencing investor decisions in real time..

5) So while this could be a bearish bet, it is also likely to protect AUM.
But why now?
Perhaps they are worried about the manipulation of the Spot/derivatives market during a illiquid weekend.
Maybe they’re just worried about next week against the dips

For his part, popular trader and commentator Pentoshi offered a more cautious perspective.

For him, only a recovery of levels significantly beyond the current tight trading range on lower time frames would be enough for a more bullish sentiment on what could come for the BTC/USD pair.

“44,500 is the most important point for bullish momentum currently. 42,000 Resistance 1D”, saidto his Twitter followers on Saturday along with an explanatory graphic.

“Below the bias is for redistribution and another leg down. I think the buyers have to step in pretty quickly.”

Annotated chart of the BTC/USD pair. Source: Pentoshi/Twitter

100 days until “capitulation”?

Meanwhile, Pentoshi was not the only voice predicting a long-term gain but short-term pain for bitcoin price: a narrative, which had gathered momentum throughout 2022.

Analyzing market movements, Kevin Svenson, well known on social media for his bullish sentiment towards BTC, warned that current chart behavior was mimicking the period just before the bitcoin bear market crash in late 2018.

While that event followed a long period of lower lows throughout the year, bitcoin price has been making higher lows in 2022, he noted, but it wouldn’t take much for the rules to change and between “capitulation”.

The difference between those higher lows and a breakout is significant right nowso blindly being on the sidelines and not considering anything else is a bit silly in my opinion,” he said.

Discussing why #Bitcoin market psychology is mirroring the $6,000 pre-capitulation.

Long term – Bullish.
Medium term – I see downside risk.

Svenson added that bitcoin price was “coming up” in terms of following a historical pattern of putting a macro low around 800 days after each block grant halving. The last halving — on May 11, 2020 — was 706 days ago.

Clarification: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information set forth herein should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.

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