Bitcoin retreats towards $38,000 after Friday sparked losses on “almost everything” outside of China

Bitcoin (BTC) fell into the May bank holiday weekend after crypto losses reflected “basically everything” in late trade.

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

Macro keeps BTC firmly in place

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD reversing at $38,180 on Bitstamp and circling $38,600 on April 30.

The pair had performed poorly on April 29th and this nonetheless reflected the vast majority of traditional assets with the notable exception of Chinese equities.

“Everything is down today except for gold, platinum and Chinese stocks,” said economist Lyn Alden summarized.

As a result, the S&P 500 ended April 29 down 3.6% and the Nasdaq 100 down 4.5%. Hong Kong’s Hang Seng, on the other hand, gained 4% overall.

The US Dollar Index (DXY), despite faltering after hitting 20-year highs, offered no recovery as it began to consolidate near its two-decade high.

“It would be quite difficult for the price to recover against a macro bear market in the short term. What counts is what happens after a correction,” says statistician Willy Woo argued in a Twitter debate.

“But the DXY is also at several technical resistances. If the government steps in with yield curve control, we could see the markets rally.”

Yield curve control is also seen as a major game changer not only for crypto but also for the economies ruled by governments that instigate them.

“YCC is the endgame,” predicted ex-BitMEX CEO Arthur Hayes in his latest blog post published last week.

“Finally, when it is declared implicitly or explicitly, it’s game over for the value of the USD versus gold and, more importantly, Bitcoin. With YCC, we get $1 million in bitcoin and $10,000 to $20,000 in gold.”

US Dollar Index (DXY) 1 hour candlestick chart. Source: TradingView

The “Supply Shock Squeeze” curiosity is picking up speed

Explaining why BTC/USD remains range-bound, Woo said events could mimic Q4 2020 – just before Bitcoin broke out of what was then a three-year trading range.

Related: Trader points out BTC price levels to keep an eye on as Bitcoin still risks an “ultimate bottom” of $30,000

“Bitcoin price is sideways as Wall Street sells futures contracts in a macro risk off trade. Meanwhile, institutional money is creating spot BTC at peak prices and moving to cold storage,” he wrote.

“It’s at times like these that I remember the supply shock in the fourth quarter of 2020.”

An accompanying chart showed inflows and outflows from exchanges versus spot price, showing the impact of a “supply shock”.

Bitcoin exchange net flows vs BTC/USD annotated chart. Source: Willy Woo/ Twitter

As Cointelegraph recently reported, the same conclusion is drawn from data on bitcoin whales as well.

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