Bitcoin (BTC) begins the new week cautiously holding on to support at $60,000, with sentiment hovering between bullish and bearish.
BTC price action is sticking to a narrow trading range. What can cause such a dramatic change in speed?
This week is better than ever for volatility in the cryptocurrency market. The combination of US macro data and comments from Federal Reserve Chairman Jerome Powell could be an explosive mix for risk assets.
Even at this established range, there are many risks to Bitcoin bullishness. The market is already signaling a deeper correction and traders are already indicating which level could come next.
It primarily focuses on bid liquidity below $50,000, an attractive area for long-term market bottoms. However, in the short term, BTC/USD appears to be more interested in boosting liquidity as the week begins.
Cointelegraph takes a look at the current state of play when it comes to BTC/USD performance.
BTC Price: All around $60,000
A barely noticeable weekly close means Bitcoin is still in familiar territory during this week’s TradFi session.
Data from Cointelegraph Markets Pro and TradingView shows a lack of volatility in BTC/USD through the end of the week.
Crucially, the $60,000 level has held since the recovery on May 3, and for some this level marks the bull’s red line.
Commenting on a chart uploaded to
“Bitcoin is still hovering above $60,000 and the downtrend is breaking,” he wrote.
“That blue OB is going to be key in the short term. Lose this and we’ll likely revisit the lows and go even lower. It is likely that we will have another leg up on liquidity above the high of 64-67,000.”
Cullen added that this week’s macroeconomic data releases, particularly the Consumer Price Index (CPI) on May 14, should play a pivotal role in BTC price action.
As Cointelegraph reports, the $60,000 zone represents more than just a bid. Key moving averages and other bull market support trend lines have converged here.
Popular trader Daan Crypto Trades pointed out that the so-called “bull market support band” is still pushing prices higher.
“We broke right out of the bull market support zone last week,” he told X followers over the weekend.
“It has provided good support so far during this and previous bull cycles. Let’s see how we do from here.”
The support band consists of two exponential moving averages (EMA).
Meanwhile, the latest data from monitoring resource CoinGlass shows a new $65 million bid block priced at around $60,250 overnight through May 13.
The cloud of liquidity waiting above $62,000 is now clearing in what could be the next spot price battleground.
A day earlier, fellow trader Skew said he suspected “passive spot buying” responsible for support near $60,000 without a test.
“Overall good spot bidding depth $60K – $58K,” part of X comment Added.
CPI takes a hit as Fed’s Powell delivers speech.
All eyes are on macroeconomic developments in the U.S. this week as data printing comes thick and fast.
CPI forms a highlight with regard to the inflation debate and risk asset hopes for interest rate cuts.
But before that, on May 14th, the April Producer Price Index (PPI) will be released and Federal Reserve Chairman Powell will make a public speech.
Chairman Powell is scheduled to discuss economic issues with Dutch central bank governor Klaas Knot at the Foreign Bankers’ Association’s annual general meeting in Amsterdam.
Markets have proven to be very sensitive to Powell’s tone when it comes to hints about future policy moves.
The latest data from CME Group’s FedWatch Tool highlights the sentiment. Traders see little chance of a rate cut at the Fed’s next meeting in June, and the chances will only increase significantly in September.
“If CPI inflation rises again this week, it will be the third STRAIGHT monthly rise.” Trading Resources The Kobeissi Letter I left a comment. The next few days are described as “very busy” with the weekly macro diary dates posted on X.
Long Term Holders Will Stop BTC Distribution in 2024
Seasoned Bitcoin holders are focused on a bull run in 2021, as seen through some on-chain data.
In a positive development, Long Term Holders (LTHs) are increasing their BTC exposure after deploying to the market throughout 2024.
This is the conclusion of JA Maartunn, who contributed to the on-chain analysis platform CryptoQuant.
Uploading In some of his recent findings on
“They see Bitcoin’s low price as an opportunity to accumulate coins cheaply and then reintroduce them to the market during the hype phase,” Maartunn explains in his analysis for CryptoQuant.
“Interestingly, we can draw trend lines between data points in 2018, 2021, and 2024. As explained earlier, a cyclical trend occurs where long-term holders buy in declining markets and sell in rising markets. But there are also broader, ongoing trends at work. Despite this cyclical trend, the proportion of long-term holders consistently holding Bitcoin is increasing.”
As Cointelegraph reported, both Bitcoin and Ethereum (ETH) speculators, known as short holders or STH, are currently forming another support level that has been widespread throughout the bull market.
Funding rate resets continue across cryptocurrencies.
Bitcoin and altcoin market watchers may not have to wait much longer to see more diverse conditions reappear.
The current situation across the derivatives market demonstrates the degree of neutrality that is now a hallmark of cryptocurrencies.
In particular, funding rates remain neutral regardless of short-term price fluctuations. This seems like a blip on the radar that pushed Bitcoin to record highs in March.
Daan Crypto Trades commented on this phenomenon: “Crypto funding rates have been falling to neutral levels for a long time, rather than overheating in February/March.”
A widespread fund reset is scheduled for the end of March, according to CoinGlass data.
“Basically, here’s how it goes. Slow markets, breakouts, overheating, resets. Rinse and repeat.” Daan Crypto Trades added:
“Fear and indecision”
While prices operate within a set range, volatility is already evident elsewhere in the cryptocurrency.
Related: Bitcoin Trades Sideways While TON, RNDR, PEPE, and AR Send Bullish Signals.
The Crypto Fear and Greed Index, a classic gauge of market sentiment, has been fluctuating between different weeks this month.
Lagging indicators use a variety of factors to determine the impulsive tendencies of cryptocurrency traders, with extreme numbers suggesting that the market could reverse out of thin air.
Fear and Greed are fairly neutral at 57/100 as of May 13th, a strong contrast to the 71/100 seen on May 6th and inches away from “extreme greed” territory.
In a new analysis from May 11, research firm Santiment likewise attributed the decline in Bitcoin on-chain activity to traders’ “fear and indecision.”
According to the attached chart, the total amount of on-chain activity has fallen to levels last seen in 2019.
“Bitcoin’s on-chain activity is approaching historic lows as traders dramatically slow transactions two months after all-time highs,” Santiment wrote.
“This is not necessarily a sign of a falling BTC price, but rather a sign of crowd fear and indecision.”
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.