Bitcoin extended losses and broke through the important barrier of $40K during the weekend. A fall in the digital asset came mainly due to its high correlation with indices SPX and NASDAQ. The premier cryptocurrency's correlation with these stock indices reached 100, which has had a negative effect on its price. Bitcoin seems to have lost a chance for a short-term bullish trend.
Yet, not all analysts support this viewpoint. Crypto analyst Benjamin Cowen believes that a new trend in BTC may soon begin. The expert says the current price movement reminds him of how a bullish trend emerged in 2013 and a bearish one started in 2018. The present price behavior looks similar and is represented by the formation of multiple swing low support levels forming a trend. Should the asset hit the $49K-$50K range, in line with the SMA 200, the likelihood of a bullish trend will increase, the analyst is sure.
The analysis of past and future movements is usually applied by investors as one of the strategy elements. However, the current crypto market has never been through similar developments before. Bitcoin's correlation with the equity market has grown, while volatility has decreased to an all-time low. That is why the present situation is so unique. For the first time in its history, BTC has had objectively equivalent features: a high yield, risk hedging, and a reserve asset. The problem is that investors are now in two minds about a unified approach to the investment value of cryptocurrencies. This is why the bullish trend has not emerged yet. While MicroStrategy and Luna Foundation are bullish, most investors choose profit taking.
At the same time, that would be wrong to say that the asset has no growth potential. In light of current circumstances, we can see sellers' advantage and buyers' passive accumulation. Given such a negative fundamental background, technical analysis will not be enough to instill optimism. Steep pullbacks of BTC have formed swing lows that used to be support levels. However, in the wake of repeated testing of these values and the unclear reaction of buyers, the price broke through the lower limit of the ascending channel. It is a bearish signal revealing the deepening of the bearish trend and hinting at the desire of whales to purchase BTC coins at a more profitable price.
Bitcoin has broken through not only the ascending channel but also the Bearish Flag pattern that started to emerge in December 2021. In the daily time frame, the pattern has downside potential in the $25K-$30K range. Technical indicators signal a clear bearish trend. No reversal is confirmed by the MACD. In other words, major players are prepared for a fall and an increase in the number of short positions. They are likely to protect the $30K-$32K range. An earlier bounce may well occur if a mass sell-off takes place. On April 18, however, bitcoin is one step away from a full-fledged bearish trend and is about to break the $30K barrier.