After dropping below $45,000 on March 31, Bitcoin (BTC) surprised investors with a quicker-than-expected recovery to the $46,500 level.
Data from Cointelegraph Markets Pro and TradingView shows that bears managed to drop BTC to an overnight low of $44,210 before bulls showed up in force to lift the price back above $46,500 by midday.
Here’s what several analysts are saying about the short-term outlook for Bitcoin moving forward and what developments could present headwinds for the top cryptocurrency as a new month gets underway.
The macro environment continues to impact BTC price
Events in the global financial market continue to have a large impact on cryptocurrency markets and are likely to continue to do so for the foreseeable future.
According to Macro Hive CEO Bilal Hafeez, “currently macro is dominating Bitcoin” as evidenced by the “last few days of equity weakness” that “has also led to Bitcoin declines.”
Hafeez also pointed to higher interest rates in the United States, a more hawkish Fed and weakness in the Chinese markets as reasons for the current volatility in equities markets.
While these macro events continue to weigh on financial markets, Macro Hive noted that there are signs of hope in Bitcoin-specific metrics.
“Bitcoin-specific dynamics are bullish with renewed exchange-traded fund (ETF) inflows, open interest rising and HODLers accumulating.”
Traders are waiting to break above $48,000
The pullback in BTC price over the past 24-hours was somewhat expected, according to David Lifchitz, managing partner and chief investment officer at ExoAlpha. Lifchitz pointed to Bitcoin's “seven-day win streak” and tend-of-the-quarter activity from institutional investors as contributing to the decline.
Despite the pullback on March 31, Lifchitz indicated that “the upside support trendline from March 21 remains intact,” and will likely hold as support moving forward barring “a revisit of the low $40,000s in the next couple of days.”
“Wildcards” identified by Lifchitz that could affect this outlook include “the situation in Ukraine, the EU financial commission going after crypto with a vengeance and the Mt. Gox liquidation that could come any day.”
“A break above $48,000, then $51,000 is what the bulls are looking for, so we'll see if they are served next week (new quarter = potential for new institutional inflows.”
Related: Just 2 million Bitcoin left: Bitcoin hits the 19 million milestone
BTC is at the end of a major corrective period
A final bit of reassurance was provided by market analyst Will Clemente, who posted the following chart noting the “pretty clean reaction from BTC so far on this pullback.”
The significance of April 1's bounce was succinctly summarized by market analyst and pseudonymous Twitter user PlanC.
The overall cryptocurrency market cap now stands at $2.137 trillion and Bitcoin’s dominance rate is 41.1%.
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