We are currently experiencing one of the most monotonous periods in bear markets. Bitcoin is wavering, moving $500 up and down, but always ending up at the same point. The $27,000 level has been challenging for Bitcoin’s price. Should it transpire, let’s remind those claiming easy profits in cryptocurrencies in the next bull season of these times.
Why Can’t Bitcoin (BTC) Rise?
In the first four months of the year, Bitcoin‘s price closed with green monthly candles, each new month witnessing new peaks. However, May is different, with the month’s candle turning red. High volume sales ongoing since the first day of May have significantly undermined investors’ risk appetite. The market liquidity is low, and a group of investors triggering speculative movements are seemingly running wild in the order book.
Bitcoin was unable to rise this week either, with the increased market anticipations of a US Federal Reserve rate hike in June. These expectations were formed thanks to the low unemployment claims data released during the week and hawkish tones adopted by Fed officials. Board member Philip Jefferson said at the 2023 International Insurance Forum in Washington, “On one hand, inflation is very high, and we haven’t made sufficient progress in lowering it.”
He added, “On the other hand, GDP has significantly slowed down this year, and the labor market has begun to clearly feel the effects of interest rates, which are 5 percentage points higher than a little over a year ago, even if its impact has eased somewhat so far.”
The CME Group’s FedWatch tool showed a 95% chance of pausing interest rate hikes right after the last Fed meeting. But what about today? These days, the probability of interest hikes continuing is increasing.
The Future of Cryptocurrencies
Material Indicators displayed the owners of buying and selling liquidity that manipulate BTC price behavior in short timeframes. In its latest market report, it highlighted how the market was swiftly steered following yesterday’s data.
When the price began to fall, a bid ladder solidified and the price moved to approximately $26,500, near the previous support. However, a selling wall was swiftly installed to suppress the price. About 90 minutes later, and after a few bites in the selling wall, the roof was pulled. Shortly after, a new $36 million bid block came under local support and started to melt.
This suggests that shallow liquidity in the market makes the price much more manageable. We mentioned yesterday that just a $70 million sale could drop the price to $24,900 in a single move. And the result? According to Material Indicators’ analysis, in addition to the 100-day MA, the 200-week MA at $26,100 could be the next strong support.
However, the majority of investors are in “wait and see” mode. This isn’t hard to understand, as the market volume has dropped to around $30 billion. Analyst Michael Poppe was clear about the price. He expected bullish movements if we see closures above $27,500 and larger sales if the closing is below $26,500. However, he stressed that he would avoid taking a position between the two. It seems that not only small investors but also professional traders do not want to be harmed by shock movements in either direction.
