Bitcoin (BTC) enters the new week, month, and quarter of 2024 with several new records, leaving many to wonder if the bull market can continue its momentum.
On March 31, BTC made history by ending the first quarter of 2024 with its highest close ever. However, old resistance levels are still causing a fight between buyers and sellers, preventing Bitcoin from surpassing the all-time highs from 2021.
Price discovery remains elusive, and Bitcoin needs to reach $74,000 to overcome the majority of sell-side liquidity from latecomers. As the second quarter begins, the market is poised for potentially volatile moves.
Adding to the mix is the release of macroeconomic data, including nonfarm payrolls from the United States at the end of the week. Before that, Federal Reserve Chair Jerome Powell will provide fresh commentary. Last week, Bitcoin responded positively to Powell, who kept the possibility of interest rate cuts in 2024 in focus.
While Bitcoin continues to stay at higher levels, long-term holders are starting to take profit, going against the influx of institutional capital from spot exchange-traded funds (ETFs).
In this weekly summary, Cointelegraph examines the factors that could impact BTC price action in the coming days.
BTC achieves record weekly, monthly, and quarterly close
Bitcoin delivered for the bulls at the end of the first quarter of 2024. The weekly, monthly, and quarterly close on March 31, at just below $70,300, became the highest in history.
After reaching this milestone, BTC experienced a predictable retracement, with local lows of $68,900 a few hours later.
On shorter timeframes, BTC remains within a range that was already established last month, with $69,000 acting as a market focus.
Traders like Skew are exercising caution and waiting for clearer trend signals before making any moves.
Popular trader and analyst Rekt Capital, on the other hand, is more optimistic. He believes that Bitcoin could challenge the top of its range to confirm it as longer-term support before experiencing fresh upside.
According to Michaël van de Poppe, founder and CEO of trading firm MNTrading, the short-term trend for BTC revolves around two key levels: $67,000 and $71,700. Once either of these levels is breached, the direction is likely to be determined.
Powell and unemployment data dominate the U.S. macro calendar
One of the highlights of the upcoming U.S. macro week is the appearance of Fed Chair Powell. He will deliver prepared remarks on April 3, along with several other senior Fed officials throughout the week.
Risk assets remain optimistic about long-term economic policy, as interest rate cuts are almost guaranteed in 2024. Powell recently stated that even with “hot” inflation reports, the Fed will take a balanced approach to timing cuts.
The data to watch this week is the nonfarm payrolls, which have previously affected BTC price volatility. The release is scheduled for April 5.
Weak job numbers could increase the likelihood of earlier rate cuts and strengthen risk assets.
Bitcoin long-term holders become active sellers
As Bitcoin continues to set new records, long-term holders are taking advantage of the opportunity to take profit.
According to on-chain data from Glassnode, Bitcoin’s “diamond hands” are no longer on the sidelines. There has been a significant increase in profit-taking, with short-term holders and long-term holders both contributing to the movement of coins on-chain.
Last month, when BTC reached its all-time high of $73,700, there was a spike in profit-taking, with long-term holders accounting for 40% of the total.
Although overall profit-taking has declined since then, long-term holders still represent a significant portion of realized profits. On March 31, long-term holders accounted for nearly half of the total realized profits.
This indicates that long-term holders will play a crucial role in determining future sell-side supply pressure.
BTC price closely resembles December 2020
Glassnode has identified a similarity between the current BTC price action and the previous bull market in 2021.
By comparing this year’s performance to previous cycles, Glassnode found that the 2011-2013 cycle was an outlier. This challenges the notion that institutional interest has fundamentally changed BTC price dynamics this year.
December 2020 marked a turning point for Bitcoin, as it broke its previous all-time highs and entered price discovery. This year, Bitcoin reached a new all-time high just before a block subsidy halving, a unique occurrence.
Gold and stocks signal a bullish divergence for crypto
Market sentiment in the crypto space is increasingly optimistic about the possibility of price discovery across various markets.
The latest readings from the Crypto Fear and Greed Index show that “extreme greed” is the prevailing mood among Bitcoin and altcoin market participants. This suggests that traders could become increasingly irrational if the bull market continues.
The Fear and Greed Index has remained above levels seen during the 2021 all-time highs, indicating room for further increase before entering levels associated with cross-market price corrections.
According to research firm Santiment, investor optimism last week was driven by a belief in risk assets. Crypto traders hope that Bitcoin and other assets can perform well independently, without relying on equities or other sectors.
Disclaimer: This article does not provide investment advice or recommendations. Every investment and trading decision involves risk, and readers should conduct their own research before making a decision.