Bitcoin (BTC) consolidated under $40,000 on April 23 as market expectations favored further losses.
Data from Cointelegraph Markets Pro and TradingView followed a bearish BTC/USD after the pair touched $39,200 on April 22’s Wall Street open.
Falling in line with stocks, Bitcoin now faced the prospect of resistance that cemented itself at the $40,000 mark, with traders showing their lack of confidence in a short-term rebound.
Data from on-chain analytics site Coinglass confirmed that funding rates across derivatives exchanges were firmly negative into the weekend, suggesting that the majority of market participants expected shorting to be a profitable next trade.
For analyst Filbfilb, co-founder of trading suite Decentrader, the ratio of long to short positions was a furthe cause for concern.
Price at $47k:
— filbfilb (@filbfilb) April 22, 2022
- LS ratio was 1:1
Price at $39.5k:
- LS ratio = 3.5
Ruh-oh. https://t.co/Pazhwgj5vr
“Bitcoin back on this crucial level here. Losing this -> $36K seems next,” Cointelegraph contributor Michaël van de Poppe added in a fresh Twitter update on the day.
BTC/USD circled $39,800 at the time of writing, having avoided a trip to take buy liquidity below $38,000 so far.
Cold feet among traders was, meanwhile, echoed in sentiment gauges, with the Crypto Fear & Greed Index heading back into the “extreme fear” zone on April 23.
Despite the lack of confidence, not everyone was interested in abandoning their faith in Bitcoin beyond the short term.
Related: Nasdaq has dotcom crash 'deja vu' says trader as Bitcoin correlation rises
“Prepare yourself for the next runup. Historically speaking, this has been one of the best ranges for buying Bitcoin!” popular YouTuber Crypto Rover argued alongside a chart comparing Bitcoin price performance to the strength of the United States dollar.
As Cointelegraph recently reported, the U.S. dollar currency index (DXY) is currently near two-year highs, and a reversal has historically given Bitcoin the fuel to crack long-term downtrends.
The views and opinions expressed here 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 conduct your own research when making a decision.
The source of income for the Ethena protocol is spot staking income + short position funding rate income. The introduction of BTC collateral dilutes the staking yield, and the calm market and Ethena's large number of short positions reduce the funding rate income.
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