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Bitcoin (BTC) begins a new week in volatile territory as news of an oil supply outage offers a choppy start to the week.

Still stuck at major historical resistance, BTC/USD delivered an unappetizing weekly close on the news that oil production cuts will now kick in.

A subsequent rally may show the mettle of the bulls, but the question for analysts is what happens next: will oil prices dictate market moves, or can Bitcoin break above $30,000?

Under the hood, the picture is as rosy as ever: Network fundamentals will hit new all-time highs this week, while idle supply is rising as well.

Cointelegraph takes a look at the state of Bitcoin markets as the world digests the latest OPEC+ move.

Oil Cut Boosts Dollar as Inflation Concerns Return

A key event over the weekend, which is now altering macroeconomic conditions, is the decision to cut world oil production.

OPEC+ has announced voluntary production cuts totaling 1.65 million barrels per day, and the impact was felt immediately: the US dollar is rising along with energy costs.

A classic headwind for risk assets including crypto, the US Dollar Index (DXY) was trading above 102.7 at the time of writing, up from April lows of 102.04.

“Eyes on DXY this morning…. This bounce could just be to fill a void like I talked about last week. I was waiting for this filler”, popular trader Crypto Ed reacteduploading an explanatory graphic to Twitter.

“Time for DXY to show its direction (which should affect BTC’s PA).”

Annotated chart of the US dollar index (DXY). Source: Crypto Ed/Twitter

While the OPEC+ movement took its toll on assets from Bitcoin to gold, Alasdair Macleod, Goldmoney’s head of research, argued that governments would need to inject liquidity to offset any rise in energy prices, thus once again boosting the return on risky assets.

“Markets will react soon to this weekend’s surprise OPEC production cut,” financial commentary source The Kobeissi Letter continued in his own dedicated analysis.

“Oil prices are likely to rise above $80.00 again, an unwelcome development for central banks trying to combat inflation. Supply-side inflation will worsen on this news.”

Higher inflation, in turn, would increase the likelihood that central banks will continue to raise interest rates despite the ongoing banking crisis in the US and abroad.

According to the latest estimates from CME Group’s FedWatch Toolmarkets currently believe the Fed will raise rates another 0.25% in May, having been more in favor of a pause earlier.

Fed target rate probability chart. Source: CME Group

Bitcoin Price Rebounds From OPEC+ News

Bitcoin initially felt the pressure of the OPEC+ decision as the weekend faded, dipping below $28,000 to close out the week in disappointing style.

However, during the Asian trading session on April 3, BTC/USD staged a flash comeback, jumping $865 from the overnight lows of $27,600 on Bitstamp.

Popular trading account Daan Crypto Trades noted that by doing so, Bitcoin had closed another CME futures gap and thus exhibited classic Monday trading behavior.

Fellow analytics account Skew followed near-term developments and predicted a “much bigger reaction” over the next week.

Looking ahead, however, crypto education and analytics resource IncomeSharks kept a bearish outlook on BTC.

“I just can’t stop seeing the Mcdonalds double top pattern,” he wrote on the day, referring to the BTC/USD structure in 2023 thus far.

“You now have a diagonal trendline breakout, low volume, and weak OBV. Logic and unbiased emotions say to sell/short this, I don’t see a reason to be bullish anytime soon YET.”

BTC/USD annotated chart. Source: IncomeSharks/Twitter

Trader and analyst Rekt Capital wasn’t so sure.

“It is not yet clear if BTC is forming the second part of its Double Top formation,” he said. argument in his last analysis.

“$BTC would need to drop to ~$27,000 (blue) soon if the pattern is to fully play out and form an M-like shape. Lose ~$27K -> Double Top validated. Something to consider.”

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

Another week, another Bitcoin mining record

Fall or no fall, Bitcoin network fundamentals are in no mood to turn bearish this week.

According to the latest estimates of BTC.comBitcoin difficulty should enact another increase at the next automatic reset in three days.

This will take it to 47.92 billion with an increase of 2.3%, marking new all-time highs for difficulty.

Overview of the fundamentals of the Bitcoin network (screenshot). Source: BTC.com

Data of MiningPoolStats meanwhile, it shows a similar upward trend for the hash rate, which by some measurements hit a record high of 400 exhashes per second (EH/s) in recent days.

Looking at what might be behind the rapid growth, Sam Wouters, a research analyst at mining company River, suggested it was likely marginalized rigs returning to operations on the back of price increases.

“Several large public miners are rumored to have significant inventories of unused ASICs. Even though the price of Bitcoin was so low and as much inventory as possible was brought online last year, at some point it reached the maximum capacity of what the network could handle,” he wrote in part of a dedicated article. . Twitter thread the 27th of March.

“Now that the price has gone back up and some time has passed, more of this inventory has been able to come online.”

On-chain analytics company data glass node meanwhile, it shows that miners have started trying to retain more BTC than they earn.

On a rolling 30-day basis, miners’ net position change is now back to positive after two weeks of downtrend.

Bitcoin miners net position change chart. Source: Glassnode

Idle BTC Supply Sets New Records

Bitcoin is known for its ability to create supply shocks, but the latest data underlines the long-term trend.

Despite BTC’s price comeback this year, the amount of the available supply now dormant for a decade or more is at new all-time highs.

That record was broken once again this week, with 2,691,418,953 BTC not leaving his wallet since at least April 2013.

This equates to 12.81% of the total possible supply of 21 million BTC, or 13.91% of the supply mined thus far.

The BTC supply was last active 10 years or more ago. Source: Glassnode/Twitter

Any massive interest in BTC will mean that buyers have a dwindling supply to buy. Exchange balances, while rising slightly in 2023, are still near their lowest level since early 2018, Glassnode confirms.

Bitcoin exchange balance chart. Source: Glassnode

“Too elated?”

Crypto market sentiment has not yet digested the possibility of a significant pullback.

Related: Bitcoin Liquidity Drops To 10-Month Low Amid US Bank Run

According to the classic sentiment indicator, the Crypto Fear and Greed Index“greed” is what continues to characterize the general mood.

As of April 3, Fear & Greed measures 63/100, near its highest level since Bitcoin’s all-time highs in November 2021.

“The Cryptocurrency Market Is Getting Too Euphoric,” Analysis Resource Game of Trades warned at the end of last month.

While high, the greed level represented by the index still has considerable room to grow into “extreme” territory closer to 90, a classic sign that a major market correction is due.

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

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