Bitcoin holds $40K over Easter but thin liquidity, ‘capitulation’ risk haunt traders

Bitcoin (BTC), which chose compression over Easter weekend, spared nervous traders a new dive below $40,000.

BTC/USD 1-hour candle charts (Bitstamp). Source: TradingView

Derivatives traders do not take any risks

Data from TradingView and Cointelegraph Markets Pro showed that BTC/USD was trading in a narrow range with $40,000.00 as the ceiling on Saturday and Sunday.

As the holiday period began, the pair saw very little activity. The United States equity markets were closed from Good Friday onwards. This allowed crypto to avoid correlation-based volatility.

Bitcoin was also set for four days “out-of-hours trading” on Monday, which is also a non-trading holiday. Although this meant that the stock correlation was less important, other forces were at work to stir sentiment.

Market liquidity was lower than on workdays. Some fear that sudden movements could be magnified by thinner order books.

Deribit Insights, a research arm of trading platform Deribit identified liquidity as one factor that influenced real-time investor decisions by analysing derivatives movements over the weekend.

5) This could be a bearish move, but it is likely to protect AUM. Why now? They might be concerned about Spot/derivs market manipulation over an inliquid weekend. Maybe they are just worried about falls over the coming week

Pentoshi, a popular commentator and trader, provided a slightly different perspective.

He believes that a reclaim at levels substantially beyond the current trading range over short timeframes is sufficient to give rise to a bullish outlook on what lies ahead for BTC/USD.

“44.5k is the most important spot for bullish sentiment currently. He shared the following information with Twitter followers on Saturday, along with an explanation chart.

“Below bias” is for re-distribution, and another leg down. Buyers need to quickly step in.

Annotated chart of BTC/USD Source: Pentoshi/ Twitter

100 days until “capitulation”?

Pentoshi wasn’t the only one predicting Bitcoin’s long-term gains but short-term pain. This narrative was growing in momentum through 2022.

Related: Bitcoin holds onto $40K support, as the focus returns to BTC’s price’supercycle.

Kevin Svenson, a well-known social media personality for his bullish sentiments on BTC, warns that the current chart behavior is reminiscent of the period right before Bitcoin’s bearish crash in 2018.

He noted that Bitcoin had been making lower lows for a long time, but that it was now more likely to see a turn in the tides and allow “capitulation” to occur.

He said, “The difference between higher lows or a breakdown is substantial right now. So blindly focusing on one side and not considering any other is foolish in my opinion.”

Discussion on why the #Bitcoin market psychology mirrors $6K pre-capitulation. Long Term – Bullish. Medium Term – I see downside risk.
— Kevin Svenson (@KevinSvenson_) April 16, 2022

Svenson said that Bitcoin was “getting to there” by following a historical pattern, which sees it drop to a macro low approximately 800 days after every block subsidy halving. The 706-day-old last halving occurred on May 11, 2020.

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Eileen Wilson

Eileen Wilson –Technology and Energy My Name is Eileen Wilson with more than 5 years of experience in the Stock market industry, I am energetic about Technology news, started my career as an author then, later climbing my way up towards success into senior positions. I can consider myself as the backbone behind the success and growth of with a dream to expand the reach out of the industry on a global scale. I am also a contributor and an editor of the Technology and Energy category. I experienced a critical analysis of companies and extracted the most noteworthy information for our vibrant investor network.

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