Price Development after Bitcoin ETF Approval
The first months after the approval of the first Bitcoin ETF we saw a strong upward price development. Bitcoin’s price rose from $47,000 at the time of approval to $73,000 on March 14. This marked a new all-time high. And with that we definitely seemed to be in a new bull run. Although the price of Bitcoin has set a new top, we see that the rest of the market is struggling. Many altcoins are still far from their previous all-time highs. There still seems to be sufficient potential for altcoins. But the question is whether that is correct. And within what period we can expect a strong run of altcoins. Therefore, we need to take a closer look at a number of factors.
To start with, we should look at the recent movements of the Bitcoin price on the somewhat higher time frames. What is striking here is that a range was formed around the time the new all-time high was reached that was well respected. For example, we see a range high forming around the all-time high of $73,000. Followed by a range low of around $62,000. Ultimately, we saw the range low broken at the end of April. This is basically a strong bearish signal as we have seen the market structure change from an up-trend to a down-end from then on.
Economic Situation in the US
In the days after the range low was broken, we were able to witness quite special price developments. We saw the price shoot back up above the range low quite quickly. And that this resulted in a reclaim of the previously formed price range. That is positive and a strong bullish signal. However, there is something special going on here that makes the situation uncertain. We saw that this reclaim took place exactly at the time of an update regarding the development of employment in the US. The American jobs report was released by the FED. And this showed that growth in employment is much lower than previously expected. This gave the price of Bitcoin a positive boost, because new interest rate increases from the FED may be imminent. The question is therefore to what extent this range reclaim can be attributed to the relative strength of Bitcoin. Or was purely caused by the release of this jobs report.
End of the Bitcoin Bull Run?
It is clear that the last few weeks have not been good. And the question is whether we can categorize this as a healthy correction and accumulation phase. Or that we can definitively speak of an end to this bull run. In any case, what we can see is that the area in which the price is currently moving is very important for the direction we will move in the coming period. As mentioned, the range low around $62,000 is an important level to maintain. If this happens, we can speak of a classic deviation that has formed immediately after breaking the range low. That would be positive.
In addition, we see on the 4H chart that there is an important support zone around $58,000. For now, it is important to at least remain above this zone to enable further upward price development. And that is necessary because if we zoom out we see that after reaching the new all-time high, mainly lower highs have formed.
Conclusion:
All things considered, the situation is quite bearish and you would do well not to enter into too many new positions. Certainly not when the price moves below $58,000. Sentiment will only change again once we manage to permanently maintain the range low in combination with the formation of a new higher low and higher high. So for now you would be wise to protect previously made profits from a previous run. And take on more risk again as soon as more bullish price action occurs.