Bitcoin (BTC) starts the new week on a bullish note as it returns to $64,000.
The impressive comeback has left BTC price action well behind recent lows, gaining nearly $8,000 compared to last week’s sell-off.
Although there were some gains over the weekend, they still proved to have strength, and the bears were not so lucky during the Asian trading session on May 6, sending the markets back down.
So, the mood is quite different in the second week of May, but already an increase in greed is noticeable.
Can Bitcoin and altcoins manage sustainable momentum toward all-time highs?
That’s the question traders and analysts will be asking after the stock hit a two-month low and significantly depleted leverage.
The situation remains promising as funding rates are neutral on exchanges and there are few signs of popular appetite to buy BTC at current levels.
But it is this core level of support that will be tested anew if the situation worsens further. This includes a short-term holder (STH) cost basis and a 100-day moving average. Both are classic bounce levels.
Cointelegraph takes a closer look at the current state of Bitcoin as the average trader recovers from a hair-raising start to the month.
Bitcoin bulls emerged victorious after the weekly close.
The weekend ultimately posed no threat to Bitcoin’s strength, providing some unexpected upside to close the week.
It reached about $64,000 on Bitstamp, about $900 higher than it was at the end of April, according to data from Cointelegraph Markets Pro and TradingView.
While not a huge weekly candle, this performance represents an impressive return to form, with BTC/USD climbing as high as $56,500 in the meantime.
Unsurprisingly, market observers are quietly optimistic.
“It rallied quickly, wiping out all the liquidity it had built up over the past two months,” summarized popular trader Daan Crypto Trades in a recent post. Commentary At X.
“We are still in a larger range, but we could at least get some upward momentum next week.”
Tony Severino, founder of cryptocurrency technical analysis platform CoinChartist, pointed out the similarities between last week’s plunge and similar declines during the bull market.
“Every rally in Bitcoin since November 2022 has been a weekly hammer,” he said. exposed Over the weekend.
“Is it different this time?”
previously postSeverino added that prices are trying to regain the upper monthly Bollinger band. This has served as support since February.
“This is a potentially positive development,” he suggested.
BTC/USD is up 5.8% so far in May, narrowing its overall Q2 loss to less than 10%, according to data from monitoring resource CoinGlass.
BTC price level is determined
Cryptocurrency markets are notoriously volatile, and new trends can fade quickly, causing sentiment to drop accordingly.
Once a change in Bitcoin’s trajectory is detected, traders and analysts will be interested to see to what extent nearby support levels are successful in limiting a new downtrend.
Michaël van de Poppe, founder and CEO of trading firm MNTrading, is one commentator who emphasizes the importance of $60,000 despite last week’s gains offering little comfort.
“There is no retail store here with more than $60,000 worth of Bitcoin,” he said. said X followers talk about the relative lack of fanfare that followed the market’s return.
“As long as Bitcoin stays above $60,000, this range is completely fine. Altcoins are slowly waking up.”
As Cointelegraph continues to report, $60,000 is consistent with several trend lines that have been pushing BTC/USD higher since the bull market began in early 2023.
This includes the 100-day simple moving average (SMA) and the STH realized price (based on the total cost to an entity of holding the coin for 155 days or less).
These two levels are $60,650 and $59,920 as of May 6, with the latter figure provided by statistical resource Look Into Bitcoin.
Meanwhile, financial commentator Tedtalksmacro added the 50-day exponential moving average (EMA) to the mix in a May 6 research note.
“The 50D EMA is at $64,000. Where BTC is currently trading, reclaiming this level is important to define the market structure for the higher period,” he explained.
“Momentum and trend traders pay attention to the 50EMA when exploring trends.”
More US jobs data is casting a shadow on the dollar.
The upcoming week is relatively quiet in terms of macroeconomic data, but recent events give traders plenty to monitor.
The latest U.S. jobs figures boosted risk assets across the board late last week. This puts it firmly on the radar for cryptocurrencies.
With the Federal Reserve increasingly expected to cut interest rates in the coming months, easing financial conditions is becoming a question of when rather than if.
Van de Poppe said quantitative easing (QE) may return. That said, a return to the Fed is likely to increase available liquidity.
“It’s very likely that most of the pain has already come to altcoins,” he said. assert.
“The coming week will be an interesting one. We may see some more upward momentum as Friday comes with terrible economic data showing the way for the dollar and Bitcoin. QE will start soon.”
The strength of the US dollar hurt employment data, with the US Dollar Index (DXY) falling sharply to its lowest level since April 10.
Therefore, attention will be focused on jobless claims data in conjunction with the Fed’s scheduled interest rate cut on May 9th.
Leverage ignores BTC price bounce.
As Bitcoin approaches $65,000, the mood in the derivatives market has become noticeably calmer. But like emotions, situations can change in an instant.
Current data shows virtually neutral funding rates for Bitcoin. This reflects speculators licking their wounds across the DecenTrader trading suite.
“Bitcoin funding rates have returned to a more neutral state after going negative late last week,” X Post Confirmed.
“The drop below $60,000 surprised many traders before the price rebounded.”
etc explanation Afterwards, the funding ratio was “still healthy”. witnessing There’s a “big reset” on the way to $56,500.
Daan Crypto Trades added, “We hope to maintain this for a healthy next phase.”
A cursory look at the Crypto Fear and Greed Index provides potential food for thought. With the BTC price recovery, there has been a sharp recovery in sentiment from “neutral” to “greedy,” with “extreme greed” just around the corner.
The lagging indicator index is currently at 71/100, compared to just 43/100 on May 2.
Mining difficulty barely drops from all-time highs
$64,000 is not enough to allow Bitcoin to avoid a difficulty drop at the next automatic rebalancing on May 9.
Related: Bitcoin Transactions Reach 1 Billion
The second rebalancing in the new difficulty era is currently expected to result in a decline of around 1.3%, according to data from the BTC.com monitoring resource.
Still, the difficulty is at an all-time high, a feat emulated by hashrate as miners digest April’s block subsidy halving, raw data from MiningPoolStats confirms.
Last week, Cointelegraph reported on the continued resilience of miners, who show no signs of giving in despite market volatility.
This article does not contain investment advice or recommendations. All investment and trading activities involve risk and readers should conduct their own research when making any decisions.