Caught Between Bulls and Bears

After several turbulent weeks, the bitcoin market calmed down this week, with prices stabilizing around $84,000. Over time, Bitcoin is increasingly caught between a short-term downtrend and a long-term uptrend.

On March 28, we discussed two key premises:

In the long run we remain in a bull market until proven otherwise, with a key indicator being prices falling below the 50‑week average (the handbrake).

In the short term we are in a downtrend until evidence suggests otherwise, notably when prices exceed $92,000.

This analysis still holds today. In the three weeks that followed, the short-term downtrend persisted, with a provisional low of $74,420 reached on April 7. Meanwhile, the long-term uptrend remained intact; even though the price briefly dipped below the 50‑week average, the weekly range stayed above it.

The chart below illustrates the steadily narrowing gap between the 10‑week and 50‑week averages. The former reflects the short-term trend, while the latter signals the long-term trend.

The similarities to August 2024 are striking. At that time, a bottom just below the 50‑week average marked the correction’s nadir, followed by a remarkable surge of more than 100% – rising from $52,000 to $109,500.

From here, two paths emerge:

• In the coming weeks, the short-term trend might reverse from a downtrend to an uptrend (A). This could signal the start of a surge similar to that seen in fall 2024, although a prolonged period of sideways movement is also possible.
• Alternatively, prices might continue to fall in the coming weeks (B). In that case, the long‑term trend would reverse from up to down, and the market would be treated as bearish.

Throughout the week, prices were pushed upward from below, countering the downtrend, yet no breakout has materialized. A reversal of the trend could unfold in three steps:

1. Above $86,000: Reaching this level would put us above the 50‑day averages as well as the downtrend line. It’s an early indicator, though not particularly reliable.
2. Above $89,000: This would surpass the March 24 peak, marking the first higher high after a series of lower highs.
3. Above $92,000: Achieving this level would return us to the price range observed from November to February, indicating that the decline following the double top is over.

If we stall at the first step, we will likely search for the next bottom within the downtrend. A positive sign would be if that bottom holds well above $76,000, marking the first higher low after a series of lower lows.

For investors, Bitcoin has a dual role. On one hand, as digital gold and the sole form of digital outside money, it serves as a safe haven during geopolitical turmoil. On the other, as an emerging technology, it acts as the portfolio’s “hot sauce.”

If Bitcoin were to fully embrace its digital gold traits, now would be a fitting time. More than ever, the focus is on the decoupling of tech stocks and Bitcoin’s role as a strategic reserve.

However, this isn’t yet reflected in the price. Last week, gold surged once again, climbing above $3,300 and further widening the gap between stocks and Bitcoin. For Bitcoin to bridge the gap between stocks and gold, its price would need to climb to around $100,000.

We will continue with the following topics for our Alpha Plus members:

1. Sentiment or data: Who is right?
2. Donald Trump wants to isolate China
3. Altcoins lag behind
4. On‑chain: Investors more optimistic

1️⃣ Sentiment or data: Who is right?

Contribution by Thom

Consumer confidence in the United States dropped 40% over five months, reaching its lowest level in 45 years—a decline largely attributed to the trade war initiated by Donald Trump.

What's unusual is that virtually all sentiment indicators have plummeted historically, even though the hard economic data remains robust. Ultimately, consumer spending drives the economy, and no clear downturn is evident so far.

The US Redbook Index, depicted in the chart below, tracks the weekly revenue growth of American retail chains relative to the same period last year, offering insights into consumer spending. The index continues to deliver strong numbers, suggesting that consumers are not weakening.

A possible counterargument is that many Americans are shopping ahead of anticipated price hikes driven by import tariffs. On the other hand, one could argue that the trade war raises concerns about the economy and job security, prompting consumers to tighten their belts.

In other words, it's challenging to draw definitive conclusions from the economic data at this stage. Overall, I believe that sentiment is significantly more pessimistic than the reality.

Trump has only been pursuing this strategy for three months, and that’s crucial. In my view, there's little merit in dissecting every move or fretting over the percentages he cites, as that isn’t the main concern.

At the time of writing, the US is imposing a staggering 245% import tariff on China—a measure that goes beyond realistic tariffs and amounts to a trade blockade. At this pace, it seems unlikely this trade war will continue for another three months.

And that may be just what Trump intends, since he also wants to avoid a deep recession. While the economy has undoubtedly suffered, it's not at a level where a severe recession appears imminent.

My primary scenario remains a resumption of the bull run toward late 2025 to early 2026 – in part because Trump needs a strong economy heading into the midterm elections scheduled before the end of 2026.

2️⃣ Donald Trump wants to isolate China

Contribution by Thom

As the trade war continues, it is increasingly evident that the United States is primarily targeting China.

China is quickly establishing itself as a formidable challenger to American global dominance. Once mainly a manufacturing hub for Western companies, the country is now leading in several sectors—particularly in the electric vehicle industry, which is raising concerns.

We are at a pivotal moment in history, with breakthrough technologies emerging. Consider the fusion of artificial intelligence and robotics, and the profound impact they could have on society’s production capacity.

Those who can capitalize on these technologies in the coming years will be hard to catch up with in the long run. From this perspective, it's easier to understand why Trump is attempting to disrupt China's progress through his trade war.

According to the Wall Street Journal, the US even plans to leverage tariff negotiations with over 70 countries in an effort to isolate China.

US PLANS TO USE TARIFF NEGOTIATIONS TO ISOLATE CHINA || OFFICIALS AIM TO ENGAGE OVER 70 NATIONS IN TALKS TO BLOCK CHINA FROM ROUTING GOODS THROUGH THEIR TERRITORIES - WSJ

— First Squawk (@FirstSquawk) April 15, 2025

Although China is achieving impressive results in some areas, it is currently facing economic challenges.

The Chinese government is attempting to stimulate consumer spending, yet economic growth remains well below expectations, the property market is unstable, and the country battles persistent deflation. The trade war with the US threatens to exacerbate these issues even further.

Trump appears to be betting that the US economy is more resilient than China’s, and that an early victory could help him lure the key industries of the future to America.

Ultimately, while outsiders can only speculate, dismissing Trump as a complete fool is overly simplistic. Nonetheless, he is taking enormous risks with this policy, and we should remember that he has only been at it for three months—likely retaining some room to avoid a disastrous economic outcome.

3️⃣ Altcoins lag behind

Contribution by Bert

Bitcoin can function both as digital gold and as an emerging technology—a luxury not afforded to the rest of the crypto market. Investors in other cryptocurrencies are often driven more by speculation than by belief in the underlying technology.

The chart below displays the total market capitalization of altcoins ranked 11th to 125th. Currently, this figure is about 55% below the top, whereas Bitcoin is down 23%.

One could say we’re back to square one. The chart mirrors the same values seen in January and September 2024. However, on an individual basis, altcoins often underperform even more drastically, as the composition of the top 125 continually shifts—underperformers drop out and new hype drives others in.

This is evident when examining Bitcoin dominance—the market share of Bitcoin relative to the entire crypto market—which stands at its highest level since January 2021, just before the frenzied phase of the previous bull run.

While Bitcoin has secured a spot in the portfolios of professional investors, altcoins primarily depend on periods of heightened risk appetite among retail investors.

Therefore, altcoins are even more reliant on the resolution of the trade war than Bitcoin. As long as uncertainty persists, a broad recovery in the altcoin market appears unlikely.

4️⃣ On‑chain: Investors more optimistic

By using the Accumulation Trend Score, we gauge whether current investors are increasing (accumulating) or decreasing (distributing) their positions over a 15‑day period. After two months of predominant distribution, we are now observing early signs of a behavioral shift.

In the chart below, Glassnode uses a color scale based on a score ranging from 0 (distribution) to 1 (accumulation). We have moved from just above 0 in February to 0.2 in March, and recently, even between 0.3 and 0.4.

The heatmap below shows how this behavioral shift is distributed among different types of investors. While whales holding over 10,000 BTC still exert the greatest influence, even mid‑range investors with holdings between 10 and 100 BTC are now hovering around 0.5.

It’s too early to base decisions on this insight, but it could be an early indication that investors are not only anticipating lower prices from the current level but are also looking for potential upside.

Thank you for reading!

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• Bart Mol (@Bart_Mol)
• Peter Slagter (@pesla)
• Bert Slagter (@bslagter)
• Mike Lelieveld (@mlelieveld)

We appreciate your continued support and look forward to bringing you more comprehensive analysis in our next edition.

Until then!