Bitcoin price slow to react as US dollar rally halts at 20-year highs

Bitcoin (BTC) remained range bound on April 29 as a welcome retracement took the US dollar off its 20-year highs.

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BTC/USD 1 Hour Candlestick Chart (Bitstamp). Source: TradingView

Trader sees $40,600 as a “decisive” breaker

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD hugging support near $39,300 after failing to hold $40,000.

The pair had found modest upside potential despite a “parabolic rally” in US dollar strength over the week.

The US Dollar Index (DXY) finally started to cool on Friday after hitting its highest level since 2002.

Despite its inverse correlation, BTC/USD had not yet shown any signs of direct benefit from the changing sentiment at the time of writing.

Cointelegraph contributor Michaël van de Poppe was nonetheless confident that Bitcoin would see bullish momentum in the short term.

“Bitcoin is entering a tight playing field and is poised for a major momentum train,” he said told Twitter followers that day.

“I’m betting on the positive as the DXY is also weakening a bit. Crucial level to break: $40.3-40.6k first.”

Van de Poppe had previously highlighted the need to hold current spot price levels to pave the way towards $42,000 and above.

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US Dollar Currency Index (DXY) 1-day candlestick chart. Source: TradingView

Further tailwinds for BTC, meanwhile, came in the form of Asian market trading, with the Shanghai Composite Index up 2.4% and Hong Kong’s Hang Seng up 10% on the day, marking a broad comeback from previous coronavirus-driven sell-offs.

European indices were flatter, with Germany’s DAX up 1.2% and London’s FTSE 100 up 0.35%.

Research warns of Hodler ‘surrender’

In examining who among bitcoin holders is selling under current conditions, popular analyst Root identified shifting tendencies among long-term holders (LTHs) — those whose coins have not been moved for 155 days or more.

Related: $27,000 ‘maximum pain’ Bitcoin price is the ultimate buy-the-dip opportunity, says research

Those who bought between $18,000 and the all-time high of $69,000 — a significant portion of LTH’s base — will be forced to exit due to external forces, he warned.

“They de-risk/capitulate due to macro conditions”, part of a Twitter thread read, Root adding that it’s “bullish how the price has held up really well.”

As Cointelegraph reported, the percentage of BTC supply that is dormant for a year or more has nevertheless hit new all-time highs this month, according to data from on-chain analytics firm Glassnode.

Bitcoin (BTC) remained range bound on April 29 as a welcome retracement took the US dollar off its 20-year highs.

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Bitcoin active supply chart. Source: Glassnode

The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should do your own research when making a decision.