TLDR

• Bitcoin price is hovering around $84,000-$85,000 after recovering from a dip to $74,400
• Short-term holders (STH) are selling at a loss according to the STH-SOPR indicator, suggesting capitulation
• Global monetary stimulus from China and Europe may fuel Bitcoin’s next rally toward $90,000
• Bitcoin shows signs of decoupling from traditional markets as S&P 500 dropped 5.7% in April
• A weakening US dollar and pressure on the Federal Reserve to cut rates could further boost Bitcoin

Bitcoin has been trading in a consolidation phase around the $84,000 level after rebounding from a recent correction. As of the latest data, BTC is priced at $84,449, showing a slight decline of 0.7% over the past 24 hours. This sideways movement comes after weeks of price volatility driven by macroeconomic uncertainty.

While the leading cryptocurrency has recovered from previous corrections, it has struggled to break through current resistance levels. This suggests weak buying momentum and cautious sentiment among traders in the short term.

Market data indicates that Bitcoin recently jumped to $85,000 despite the S&P 500 index dropping 5.7% in April. This 14% rebound from Bitcoin’s trade-war induced crash to $74,400 has left many traders puzzled but cautiously optimistic.

Bitcoin BTC Price
 

Short-Term Holders Under Pressure

Analysis of short-term holder behavior provides important clues about Bitcoin’s market direction. According to data shared by CryptoQuant contributor CryptoMe, two key metrics stand out.

The Short-Term Holder Spent Output Profit Ratio (STH-SOPR) has fallen below 1.0 based on a 14-day moving average. This indicates that many short-term investors are selling Bitcoin at a loss, a pattern often associated with market capitulation phases.

While this might seem bearish in the immediate term, similar dips in STH-SOPR during past bull markets have typically presented good accumulation opportunities. These periods of loss-taking by short-term holders have historically marked temporary bottoms.

The second notable metric is the STH Realized Price, currently around $92,000. This represents the average cost basis for coins held by short-term investors. When Bitcoin trades below this level, as it currently does, it can signal undervaluation relative to recent buyer activity.

Periods when Bitcoin’s spot price dips below the realized price have often coincided with long-term accumulation zones during previous bullish cycles. However, these indicators alone don’t confirm a market bottom.
 

Global Economic Factors Supporting Bitcoin

Several global economic factors could potentially drive Bitcoin higher in the coming weeks.

In China, new bank loans in March rebounded more than expected to $500 billion, exceeding analyst predictions by over 20% and showing strong recovery from the previous month. The People’s Bank of China has promised to increase stimulus measures to reduce the impact of the ongoing trade war with the United States.

The European Central Bank has also cut interest rates for the seventh time in a year to support the eurozone economy. The ECB has lowered the cost of capital to its lowest level since late 2022. Investment banks have reduced their inflation forecasts for the region, as the tariff war could reduce the eurozone’s gross domestic product by 0.5%.

These stimulus measures in major economies typically increase liquidity in financial markets, which can benefit Bitcoin and other risk assets.

Adding to this is a weakening US dollar, as measured by the DXY Index, which has dropped to its lowest level in three years. A weaker dollar is often correlated with stronger Bitcoin performance.

Political pressure on the US Federal Reserve is also mounting. US President Donald Trump has publicly criticized Fed Chair Jerome Powell’s administration and called for lower interest rates. Trump even stated that Powell’s removal “cannot come fast enough.”

Despite these pressures, recent US economic data shows little reason for a more relaxed monetary policy. Initial jobless claims fell by 9,000 to 215,000 in mid-April, and Powell has described the labor market as being in “solid condition.”

Bitcoin miners have demonstrated strong long-term commitment, with the network hashrate increasing by 8% compared to the previous month. This comes despite concerns that the Bitcoin halving in April 2024 would cause miners to exit the market due to lower profits.

Miners reportedly hold almost 1.8 million BTC, and their continued commitment to the network is seen as a positive sign for Bitcoin’s long-term prospects.

Market analysts suggest that if macroeconomic conditions improve and liquidity returns to the market, Bitcoin could resume its upward trajectory toward $90,000.

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