Bitcoin accumulation signals suggest that the price drop to $45K will be temporary

The cryptocurrency market rally that began on April 1 encountered strong resistance on April 4, prompting a broad sell-off in the afternoon session after tired bulls were overwhelmed by bears who pushed Bitcoin (BTC) below $45,200. Following a morning sell-off of over 6 percent, BTC dropped to a daily low of $45,133 before buyers returned and bid it back above $45,700.

Here’s what a number of experts think about the short-term future for Bitcoin, and what may be ahead in April –

On April 4, cryptocurrency trader and pseudonymous Twitter user ShardiB2 noticed the Bitcoin chart’s fall earlier than most people. The price was “starting to reverse,” according to ShardiB2, with the 4-hour candle approaching the bottom of the channel, as seen in this chart.

BTC/USD 4-hour chart. Source: Twitter

The trader said, “Could we slip to $44,300? Possibly, but if we do, I [don’t] think it gets any deeper, the ONLY thing that is concerning is maybe tax selling, saw some last year…”

The chart below, posted by on-chain data analyst Matthew Hyland, illustrates the major support and resistance levels for BTC in its current price range, with a more general explanation offered.

BTC/USD 1-day chart. Source: Twitter

Hyland said, “Bitcoin is trying to flip previous resistance into new support.”

Heavy accumulation is indicated by the following signs –

Recent research from on-chain analysis firm Glassnode revealed that “shrimp and whales are the most aggressive accumulators of late,” as well as that “large public purchasers such as the Luna Foundation Guard and MicroStrategy have resumed their emphasis on Bitcoin as pure collateral.”

A similar pattern may be seen in the red-highlighted area of this chart, which indicates that larger buyers have been the main accumulators since late-January, with smaller balances.

Bitcoin accumulation trend score by cohort. Source: Glassnode

Glassnode said, “In general, the market appears to be viewing Bitcoin and its role in the future economy with a somewhat renewed optimism.”

The pattern has a Target of $125, which suggests that the breakout is imminent.

Finally, an “interesting observation” was made by crypto investor and pseudonymous Twitter user Crypto Bull God regarding the BTC price action, who shared the following chart comparing Bitcoin’s 125-day simple moving average (SMA) to its price.

BTC/USD 3-day chart. Source: Twitter

The trader said, “We can see how important this key level is. Once broken below, and then broken back above, we have appreciated massively in price.”

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