BTC price action performs a “classic sweep” of the lows, with Bitcoin on track to tackle the $30,000 mark once again.
Bitcoin (BTC) hit new month-to-date lows overnight into April 4 as fresh rumors over the biggest exchange, Binance, spooked fragile markets.
BTC price returns to $28,000 after weekly lo
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD dipping to $27,240 on Bitstamp.
Its lowest since March 28, the performance followed an outbreak of claims that Binance CEO Changpeng “CZ” Zhao, already under investigation by United States regulators, is now wanted by Interpol.
The claims came from an accidental leak of an encrypted tweet by the private Twitter account Cobie, which appeared to lack evidence, resulting in a market rebound.
Now trading above $28,000 at the time of writing, Bitcoin was exhibiting “classic” behavior, according to Cointelegraph contributor Michaël van de Poppe, founder and CEO of trading firm Eight.
“Classic sweep of Bitcoin,” he summarized.
Van de Poppe additionally referenced the macroeconomic climate, specifically a potential end to interest rate hikes by the United States Federal Reserve.
“Trend remains to be upwards, as we’re in a vacuum of ‘relief’ as the hiking process comes to an end,” he continued.
“Most likely we’ll see Bitcoin continue to $40K, but if we’ll be having a test of $25K first, I’ll be a buyer.”
A subsequent tweet declared the local lows “swept” by BTC/USD, with $30,000 as a target.
The low has swept on #Bitcoin.
— Michaël van de Poppe (@CryptoMichNL) April 4, 2023
Grinding back upwards, as long as $27,900 holds, I'll be expecting continuation towards range high and potentially $30K. pic.twitter.com/dY89M95LLF
Such optimism was shared elsewhere, including trading resource Stockmoney Lizards, which joined calls for $30,000 to hit after a “short correction.”
#Bitcoin
— Stockmoney Lizards (@StockmoneyL) April 4, 2023
Short correction, then 30k pic.twitter.com/vWf6PqHZie
Related: US enforcement agencies are turning up the heat on crypto-related crime
Eyeing the equilibrium (EQ) level of the current range at $27,700, fellow trader Crypto Tony also remained upbeat.
“Holding that EQ like a champ. No short hedges unless we close solid below that level, but for now we remain in the upper half of the range,” he told followers on the day.
U.S. recession around the corner?
On the macro front, changes were also afoot, with the weekend announcement of an oil production cut by the Organization of the Petroleum Exporting Countries, plus 10 other oil-producing nations, combined with weak U.S. economic data pressuring the dollar.
Related: Bitcoin breakout ‘matter of time’ says analysis with BTC price at $28K
The U.S. Dollar Index (DXY) was below the 102 mark at the time of writing.
For trading firm QCP Capital, the writing is now on the wall when it comes to a looming recession.
“USD and Bond yields, both drivers of BTC, reversed sharply lower last night following the release of the ISM Manufacturing – which showed the sharpest contraction since April 2020 (in the middle of the pandemic),” it wrote in its latest market update released on April 4.
“We expect more weak US data to come out this week, further cementing the recession narrative. After many false dawns, we believe this will indeed be the lasting one.”
It noted that despite the potential for Bitcoin to benefit from the mayhem, just like with last month’s banking crisis, it remained “unproven” as a safe haven during a recession.
“If the Fed were to act quickly in a recession, just as they did during last month’s banking crisis, we expect that BTC would again moon,” it continued.
“However, in a stagflationary environment, if the Fed feel they are unable to cut rates until inflation has reached their target again, will BTC follow risk assets lower? That remains to be seen. While BTC is unproven as an inflationary hedge, it is definitely the highest beta monetary irresponsibility hedge out there.”
As Cointelegraph reported, the increase in oil prices was initially thought to risk a return of inflationary forces, allowing the Fed to continue its rate hikes.
The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
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