Bitcoin [BTC] was unable to scale the psychological level of $80,000. The rejection of $79.4K on Wednesday, April 22, caused BTC to drop 3.16% to $76,960. It has since risen to $77.6K. The past two days saw $214 million in short liquidations for Bitcoin alone.
The weak $79.4K reaction and subsequent rebound in recent hours gave way to the possibility that the rally may not be over yet. There could be another move past the $80K level, which was more than just a psychological resistance at round numbers.
In a post on X, analyst Joao Wedson drew attention to the rising trendline resistance. This level has been respected in recent weeks and Bitcoin was about to test it again.
The previous test, in mid-March, saw a sharp correction back to $65,000. Should traders and investors prepare for another downward spiral in the coming days?
The market is not willing to pay a premium for long exposure
Crypto analyst Axel Adler Jr. pointed out that the 7-day moving average of the BTC Futures-Spot base has fallen from 0.465% to 0.054% in recent days.
Basis measures how much the futures market trades above or below spot prices. Positive numbers indicate that futures are trading above spot. Market participants are willing to pay a premium to stay a long time under these conditions.
The rapid deterioration of the 7DMA base made it clear that the market may not be willing to pay a premium to stay on longer.
At the same time, financing rates have remained consistently below zero in recent months. According to the analyst, this represented a steady accumulation of bearish positioning.
Together, the Futures metrics underlined the defensive positioning of market participants. The pressure of bearish positioning and disappearing long leverage has made participants more cautious about Bitcoin’s weakness.
Short-term BTC holders start taking profits
A previous AMBCrypto report argued why Bitcoin could hit a selloff around $80,000. Profit-taking by holders was expected to dampen upside momentum.
Analyst Amr Taha noted in a post on CryptoQuant Insights that 24-hour BTC inflows into Binance spiked to 8,940 BTC. This was more than the mid-January peak of 8,530 BTC.
The increase in profit-taking, combined with the rising bearish positioning, highlighted the market’s belief that the current uptrend may be nearing an end. A retracement towards $70,000 could follow soon.
Final summary
- The Bitcoin Futures Spot basis declined rapidly, suggesting market participants were unwilling to pay a premium to maintain long exposure.
- The increase in short-term profit taking was stronger than the mid-January peak.