Bitcoin (BTC) begins the new week with a return to $64,000 and bullish sentiment back in focus.
In an impressive comeback, BTC price action has moved well off its recent swing lows, netting nearly $8,000 in gains against last week’s decline.
Even though some of these gains came over the weekend, the gains proved to have staying power, with bears able to push the market lower during the May 6th Asian trading session. I haven’t been able to do it.
So, although the atmosphere is very different in the second week of May, the increase in greed is already visible.
Can Bitcoin and altcoins maintain their sustained momentum toward all-time highs?
That’s the question traders and analysts will be asking after the stock hit a two-month low and was largely unleveraged.
On exchanges, the situation remains promising with funding rates neutral and there is little sign of public desire to go long BTC at current levels.
However, if the situation worsens, it is the primary support level that will be subject to new testing. These include the short-term holder (STH) cost basis and his 100-day moving average. Both are classic bounce levels.
Cointelegraph takes a closer look at the current state of Bitcoin as it recovers from a start to the month that left the average trader cringing.
Bitcoin bulls win after weekly close
The weekend ultimately posed no threat to Bitcoin bulls, resulting in an unexpected upside that ultimately held up to the end of the week.
According to data from Bitstamp, Cointelegraph Markets Pro, this was around $64,000. TradingView When I checked, it was about $900 more expensive than it was at the end of April.
Although not huge for a weekly candlestick, this performance represents an impressive recovery for BTC/USD, during which it rose to $56,500.
Understandably, market participants are quietly optimistic.
“It wiped out all the liquidity accumulated over the past two months and then rebounded quickly,” summarizes popular trader Daan Crypto Trades in part of his latest report. Explanation With X.
“It’s still in a wide range, but at least there’s some upward momentum heading into next week.”
Tony Severino, founder of cryptocurrency technical analysis platform CoinChartist, pointed out similarities between last week’s selloff and similar selloffs during bull markets.
“Since November 2022, every time Bitcoin has gone up and hit a low, it’s been hit hard week after week,” he said. revealed Over the weekend.
“Will it be different this time?”
before postSeverino added that the price is trying to regain the upper part of the monthly Bollinger Bands, which has been acting as support since February.
“This is a potentially positive development,” he suggested.
Data from monitor resources coin glass Meanwhile, BTC/USD has gained 5.8% so far in May, reducing losses for the entire second quarter to less than 10%.
BTC price level crystallizes
Cryptocurrency markets are notoriously fickle, and new trends can disappear quickly, and sentiment can drop with them.
If Bitcoin sees a change in trajectory, traders and analysts will be interested to see how successful nearby support levels are in capping new downside.
Michael van de Poppe, founder and CEO of trading company MNTrading, also said that the $60,000 critical He is one of the commentators who emphasizes sexuality.
“Bitcoin is over $60,000, but there’s no retail,” he says. Said X followers talk about the relative lack of fanfare surrounding market recovery.
“As long as Bitcoin stays above $60,000, this range is perfectly fine. Altcoins are slowly waking up.”
As Cointelegraph continues to report, $60,000 is in line with several trend lines that have been pushing BTC/USD higher since the start of the bull market in early 2023.
These include the 100-day simple moving average (SMA) and the STH realized price (total cost basis for companies that have held the coin for 155 days or less).
As of May 6, these two levels were $60,650 and $59,920, the latter figure being offered By statistical resource Look Into Bitcoin.
On the other hand, financial commentator Ted Talks Macro stated in a May 6 research note: Added Add a 50-day exponential moving average (EMA) to the mix.
“The 50D EMA is at $64,000. Where BTC is currently trading, regaining that level is important in defining the market structure for higher time frames,” he explained.
“Momentum and trend traders pay attention to the 50 EMA when navigating trends.”
Increase in US employment data casts shadow on dollar
Next week is relatively quiet in terms of macroeconomic data, but recent events are plenty to keep an eye on for traders.
The latest US jobs report pushed risk assets across the board late last week, making it a hot topic for cryptocurrencies.
With the Fed increasingly expected to lower interest rates in the coming months, the question of whether to ease financial conditions is becoming more a question of when than if.
For Van de Poppe, quantitative easing (QE) may even make a comeback. That means a return to increasing liquidity available to the Fed.
“It’s very likely that most of the pain is already in altcoins,” he says. claimed.
“Next week is going to be an interesting week. Friday gave us some direction for the dollar and Bitcoin with some terrible economic data, so we’ll probably see a little more upside momentum. Quantitative easing is about to start.”
The strong US dollar hurt employment data, with the US Dollar Index (DXY) plummeting to its lowest level since April 10th.
Therefore, all eyes will be on unemployment insurance claims data when it comes to the timing of the Fed’s scheduled rate cut on May 9th.
Leverage ignores BTC price rebound
The mood in the derivatives market is noticeably calmer as Bitcoin approaches $65,000, but like sentiment, this can change in an instant.
Current data shows a virtually neutral funding rate for Bitcoin, according to trading suite DecenTrader, which is a reflection of speculators licking their wounds.
“Bitcoin funding rates have returned to a more neutral state after going negative last weekend,” Posted by X Confirmed.
“The drop below $60,000 spooked many traders before the price recovered.”
others explained Funding interest rates “remain healthy” testify A “major reset” on the way to $56,500.
Daan Crypto Trades added, “We hope to maintain this momentum for a healthy next step.”
Cryptocurrency Fear and Greed Index Overview Offers It can be food for thought. As the BTC price recovers, sentiment quickly returns from “neutral” to “greedy,” and “extreme greed” is just around the corner.
The lagging indicator currently stands at 71/100, compared to just 43/100 on May 2nd.
Mining difficulty barely affects drawdown from all-time high
$64,000 is not enough for Bitcoin to avoid a difficulty decrease during the next automatic rebalance on May 9th.
Related: Bitcoin hits 1 billion transactions
The second rebalance of the new difficulty epoch is currently predicted to be reduced by approximately 1.3%, according to data from monitoring resources. BTC.com.
Nevertheless, difficulty is at an all-time high, a feat mimicked by hashrate as miners digest April’s block subsidy halving, and raw data from mining pool statistics confirm.
Last week, Cointelegraph reported on the continued resilience of miners who show no signs of capitulating despite market volatility.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk and readers should conduct their own research when making decisions.
