Bitcoin price approaching $30K? Five key points to understand this week in cryptocurrency.

Bitcoin (BTC) begins a new week below $30,000 as analysts’ forecasts of a short-term support retest materialize.

The leading cryptocurrency experienced a typical drop following its most recent weekly close, causing the latest gains to dissipate, but will they reemerge?

With a relatively uneventful week ahead for macro data releases, catalysts are expected to arise from other sources as BTC price movements determine a crucial support area.

Traders have much at stake, as the previous week provided a chance to reassess altcoins while Bitcoin itself moderated its upward momentum. With a retracement currently underway, focus will shift to whether those altcoins can maintain their elevated levels.

Internally, Bitcoin’s network fundamentals remain robust, already at or near all-time highs, showing no clear indications of a downturn this week.

It may be premature to assess how price performance will affect holders, but the urge to sell at 10-month peaks is evident, with 75% of the total BTC supply now in profit.

Cointelegraph examines these elements and more in the weekly overview of potential Bitcoin price influences.

BTC price: $30,000 remains critical

Following a “quiet” weekend for BTC price movements, volatility returned dramatically at the April 16 weekly close.

This brought BTC/USD back to $30,000, marking its first significant support retest since reaching 10-month highs above $31,000 the previous week.

Traders and analysts largely anticipated this movement, suggesting it would represent a healthy retracement to set the stage for the continuation of the upward trend.

Re-purchased everything that I took profit on.
I'll reduce below $29.7K BTC and $2K on ETH.
In the worst-case scenario, I earn slightly less on the overall positions. In the best-case scenario, I earn significantly more.
Overall, the risk is manageable enough for me to re-enter. https://t.co/WH3vUVciY8

— Loma (@LomahCrypto) April 16, 2023

Cointelegraph contributor Michaël van de Poppe, founder and CEO of trading firm Eight, was among those considering a buy-in just below $30,000 but remained flexible in case of a more significant correction.

“Bitcoin is approaching the long zones. Back towards the range low, which could provide an entry point towards $32K,” he informed his Twitter followers.

“$28,600 could also serve as a long entry, but I believe we won’t be making new highs for the time being.”

BTC/USD annotated chart. Source: Michaël van de Poppe/ Twitter

Analytics platform Skew highlighted how the dip unfolded on exchanges, noting a “clean divergence” between spot sellers and derivatives traders.

$BTC LTF Aggregate CVDs & Delta
Spot-driven sell-off from the daily open, with a clear divergence between spot selling the bounce early & perps longing into the bounce. pic.twitter.com/fnpk3x8VbV

— Skew Δ (@52kskew) April 17, 2023

“This is precisely the BTC retest I was referring to,” popular trader and analyst Rekt Capital remarked, maintaining an optimistic outlook.

“$BTC is currently successfully retesting the top of the Bull Flag price broke out from a few days ago. Holding here would be a positive sign for continuation.”

An accompanying chart illustrated BTC/USD nearing an important trend line on daily timeframes.

BTC/USD annotated chart. Source: Rekt Capital/ Twitter

A more cautious Daan Crypto Trades, however, pointed out a struggle between bulls and those merely trading the current range.

“Bitcoin Range Traders are enjoying themselves while breakout traders are getting caught in these range deviations/wicks,” part of the commentary stated on that day.

“Likely to continue ranging until one side capitulates.”

BTC/USD annotated chart. Source: Daan Crypto Trades/ Twitter

Earnings dominate macro discussion

Following a significant week of macroeconomic data releases, the upcoming days are set to provide risk asset traders some comparative relief.

United States jobless claims and manufacturing data will arrive toward the week’s end, but the macro focus will shift elsewhere — particularly to earnings.

These are expected from major players like Tesla and Netflix, along with several banks — all closely monitored by market participants in light of recent developments.

“Earnings season is officially underway,” financial commentary source The Kobeissi Letter summarized.

Last week, Tedtalksmacro, a financial commentator also focused on crypto, characterized the current environment as highly conducive to continued Bitcoin growth.

“Price breaking bear market structure, macro data trending favorably, momentum oscillators reset + USD liquidity higher than pre-tightening levels… Yet the majority continue to anticipate swing shorts to new lows,” he remarked.

“~500 days of bear have created a strong recency bias…”

However, the situation appears more complex regarding stock markets, with consensus among market participants proving difficult to ascertain.

Sven Henrich, CEO of NorthmanTrader, called for more evidence of a breakout for the S&P 500 “bull market” narrative to gain validity.

“At some point, they will be correct, but in my view, based on historical trends, a new bull market is not confirmed until $SPX moves above the monthly 20MA and SUSTAINS such a move, i.e., defends it as support,” part of a tweet stated last week.

Henrich was reflecting on a claim by Tom Lee, managing partner and head of research at Fundstrat Global Advisors, who described bears as “trapped.”

“The other measure here is the weekly 100MA, which is just above 4200. While developments have been technically bullish since the October lows, markets are near these key resistance points with the $VIX at the floor of its multi-year uptrend,” Henrich continued.

“Will recent liquidity injections, which have contributed to suppressed volatility, be sufficient to maintain a move above resistance as the economy approaches a recession per the Fed staff? That’s the significant question everyone must consider.”

S&P 500 vs. VIX volatility index chart. Source: Sven Henrich/ Twitter

Bitcoin mining difficulty eyes fifth consecutive record-high

In what is becoming a bi-weekly occurrence, Bitcoin network fundamentals are consistently reaching new all-time highs.

This week, difficulty is projected to rise — currently estimated at 0.45% — according to data from monitoring resource BTC.com.

Bitcoin network fundamentals overview (screenshot). Source: BTC.com

This will mark the fifth consecutive increase, a feat not seen since February 2022.

Since the beginning of 2023 alone, over 4 trillion has been added to the difficulty tally, while the hash rate continues to reach new heights.

Raw data from MiningPoolStats recently estimated the latest all-time high at 413.4 exahashes per second (EH/s) on April 15. On January 1, the estimated hash rate was 285 EH/s.

Bitcoin hash rate raw data (screenshot). Source: MiningPoolStats

As Cointelegraph previously noted, however, changes in hash rate alone may not serve as a reliable indicator of Bitcoin’s health if assessed using precise figures.

As Jameson Lopp, co-founder and chief technology officer of Casa, mentioned in a recent blog post released on the same date as the all-time high hash rate estimate, not everything may be as it appears.

“Whenever you see someone claiming that a change in the network hashrate is newsworthy, you should always question the method and time range used to achieve the hashrate estimate,” he summarized after comparing various methods of hash rate estimation.

In Bitcoin, only seasoned holders remain

As $30,000 is tested as support, the urge to sell among those who endured the 2022 bear market is growing.

Average on-chain transaction volumes have reached multi-month highs, according to data from analytics firm Glassnode.

BTC mean transaction volume. Source: Glassnode

Overall, more than three-quarters of the mined BTC supply is now in profit — the highest in a year and arguably a clear motivation to take some of that profit off the table.

BTC % addresses in profit. Source: Glassnode

Examining market composition, Glassnode lead on-chain analyst Checkmate reached some positive conclusions.

Long-term holders currently outnumber short-term holders or speculators significantly, with the 2022 bear market prompting a shakeout that has left the market more resilient to price changes.

“Only the hardcore HODLers remain; few realize we’re up 100% from the lows. They will likely only return in earnest as we approach ATHs,” he predicted in part of a tweet this week.

Checkmate added that “Almost none of the individuals who have been here for several months are spending right now.”

“They seem to require and demand higher prices before they sell. I certainly know I do,” he stated.

Crypto “greed” inches closer to November 2021 peak

Bitcoin may be far from its all-time high of $69,000, but one metric is rapidly approaching the sentiment seen in November 2021: the Crypto Fear & Greed Index.

Related: What is the Crypto Fear and Greed Index?

The return to $30,000 was accompanied by a swift rise in “greed” across the crypto market, as indicated by its data.

As of April 17, the Fear & Greed score stood at 69/100, just 10% shy of its 75/100 mark from when BTC/USD traded at its most recent peak.

Cointelegraph has frequently reported on the potentially overheated sentiment within the market this year, and now apprehensions seem to be spreading.

“Now this isn’t a metric I swear by as it is lagging, but it provides a good indication of when to consider de-risking and exercising caution,” popular trader Crypto Tony reflected on the Index over the weekend.

“The last time we approached the 75 region was back on November 7th, 2021, when Bitcoin was trading above $65,000. Something to consider.”

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

The views, thoughts, and opinions expressed here are solely those of the authors and do not necessarily reflect or represent the views and opinions of Cointelegraph.