Business

Bitcoin rallies to near $41,000 after crypto sentiment gauge hits 6-week low

Bitcoin (BTC) experienced a welcome downside at Wall Street’s opening on April 13 as US stocks opened in the green.

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

The price target below $39,000 BTC remains

Data from Cointelegraph Markets Pro and TradingView showed that BTC/USD surged to local highs of $40,965 on Bitstamp when trading began on April 13, its best in over 24 hours.

After a frustrating range-bound period, volatility to the upside has been a relief to support levels that previously threatened to collapse.

However, traders were not overly bullish as they eyed lower entry levels for a potential long position.

As Cointelegraph reported, popular trader Crypto Ed was also risk-averse on the day, previously forecasting a bounce of relief ahead of a deeper correction below $39,000.

“I’m looking for a move, say, toward $41,000, and then I think we’re most likely going to get that extra leg down,” he said in a YouTube update released later.

Ed added that the scenario would be invalidated if BTC/USD manages to sustain above $40,500. At the time of writing, the pair is still moving towards the $41,000 target.

Macro triggers remained familiar, this came in the form of inflation after the US consumer price index (CPI) was released on April 12 at 8.5% for March, the highest reading since 1981. In the UK, the CPI rose to 7% , a 30-year index high, according to figures from the Office for National Statistics.

Sentiment heading off 6-week lows

Traders appeared primed for the rally, with the data showing modest position liquidations for both longs and shorts over the past 24 hours.

Related: BTC Stock Correlation “Not What We Want” – 5 Things to Know About Bitcoin This Week

In contrast, the drop below $40,000 had cost market participants dearly as liquidations topped $500 million, fueled by longs.

blank
Crypto Liquidation Chart. Source: coin jar

At the same time, sentiment rose as calculated by the Crypto Fear & Greed Index, which hit 20/100 or “extreme fear” on April 12th. Such a low sentiment reading was last recorded at the end of February.

blank
Crypto Fear & Greed Index (Screenshot). Source: Alternative.me

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.