Bitcoin hits $40K, investors pump Dogecoin (DOGE) after Musk confirms Twitter purchase

The cryptocurrency market fell under pressure in the early trading hours on April 25, but a brief spurt of bullish price action sparked after media headlines announced that Elon Musk had reached a deal to purchase Twitter for $44 billion. 

Data from Cointelegraph Markets Pro and TradingView shows that after dropping as low as $38,210 in the opening trading hours on Monday, Bitcoin (BTC) price staged a 5.72% rally to hit an intraday high at $40,366 as news of Twitter's sale spread across news outlets.

Here’s a look at what analysts and on-chain data have to say about Bitcoin's short-term outlook.

Declining exchange reserves point to strong accumulation

The recent bearish sentiment that has dominated the crypto market was addressed by crypto trader and pseudonymous Twitter user ‘Phoenix’, who posted the following chart showing the decline in Bitcoin held on crypto exchanges, indicating that is point toward a strong accumulation phase.

Phoenix said,

So what makes you think we would be at a point of distribution for BTC right now? These simple metrics tell me we're at Accumulation for months again. You need a thing you maybe don't have: PATIENCE.”

Bitcoin is still bullish according to historical macro cycle bottoms

On-chain data firm Whalemap suggests that while the current correction is not over, a "generational bottom" is on the horizon and as the chart shows, buying these events tend to be very profitable for investors.

As shown on the chart, the current price for BTC is well above the line that has previously marked the bottom of each macro cycle. This can be interpreted a couple of different ways – either the bearishness that has dominated the market is unwarranted at the current levels or the bull market outlook is still strong. Alternatively, one could infer that the market could be in for a real gut punch if the current weakness culminates with a final flush out to the sub-$20,000 region.

Related: Bitcoin bears tighten their grip on BTC now that $40K is the new resistance level

Will there be bullish continuation above $39,610?

A final bit of insight on Bitcoin's future was offered by market analyst Michaël van de Poppe, who posted the following chart which highlighted $39,610 as a crucial level to overcome if bulls wanted to see more upside.

van de Poppe said,

“Great bullish divergence on Bitcoin and bouncing from higher timeframes level here. Looks ready for bullish continuation.”

The overall cryptocurrency market cap now stands at $1.859 trillion and Bitcoin’s dominance rate is 41.2%.

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