As May comes to a close, Bitcoin fundamentals are exploding upward, but traders are divided regarding the strength of the BTC price.
As a result of the weekly candle close’s upward movement, Bitcoin enters a new week in a completely different frame of mind.
The largest cryptocurrency is showing signs of life after a period of stasis, with recent rises to two-month lows. Miners are unsure whether short-term strength may result in a breakout in the overall trend due to the return of volatility.
The outlook for Bitcoin as May draws to a close has traders split. Uncertainty is increased by the macroeconomic standoff surrounding the US debt ceiling agreement. Divergent views exist on the potential effects of this deal, which tries to prevent a U.S. government default.
Bitcoin traders are eagerly expecting the market’s reaction to the debt ceiling agreement as the stock markets are closed until May 30th. The early trading week for Bitcoin will probably take the form of this waiting and watching period.
Optimism Amid Debt Ceiling Talks
The debt limitation hasn’t had much of an impact on macroeconomic policy trends, but it has encouraged Bitcoin traders. Risky assets may benefit from the impending agreement to raise the ceiling and prevent a government default.
While traditional stock markets have set business hours, Bitcoin is open for business 24/7. The constant accessibility enables traders to respond in real-time to market and news developments.
Debt ceiling deal nears Congress
The Biden administration has developed and presented a plan to Congress to address the U.S. debt ceiling crisis after several weeks of drama. Even though it is still unclear if it will pass, betting on the result has already begun.
“I think it is virtually certain that it will be passed,” Jeremy Siegel, professor of finance at the University of Pennsylvania, told CNBC, summarizing a popular theory.
Currently trading at just below $28,000, the pair has managed to improve its outlook, even as it concerns the intraweek trend.
“Now that’s a really good BTC Weekly Close,” popular trader and analyst Rekt Capital responded.
“$BTC lost ~$27600 as support two weeks ago and now has positioned itself for a retest/reclaim of this same level.”
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Rekt Capital had previously warned about a looming broader breakdown which could take BTC price action back toward $20,000.
“Dip into black would be healthy and successful retest there could position BTC for a revisit of ~$28800,” he now said, flagging the zone to hold in the event of a subsequent dip to support.
According to analysis, the latest price movement of bitcoin may have invalidated a head and shoulders pattern that has developed on the daily timescales. This pattern is frequently linked to the start of the market’s long-term negative phase.
If Bitcoin is able to break out of this pattern and start moving up steadily, it might indicate a bullish reversal and refute the bearish thesis. The price movement of Bitcoin will be actively watched by traders and analysts in the coming days to determine the veracity of this pattern and any potential ramifications for the long-term trajectory of the cryptocurrency.
Related: Bitcoin mining and increasing energy bills — Sen. Warren vs. Crypto Twitter
CME gap guides BTC price dip bets
As bulls get closer to reaching the top of what has been a tough multi-month trading range, Bitcoin is now igniting controversy.
Short traders saw $44 million of positions liquidated on May 28th alone, which according to CoinGlass represents a one-month high.
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With the inference that BTC/USD should drop lower to “fill” the gap at the open, Trader Skew stated that Bitcoin’s weekend gain had created a gap in CME futures.
“Could see a sell off post debt ceiling deal & then gold / btc go on a run before the final rug,” part of a Twitter commentary said on May 29th.
MACD crossover may spark 50% gains
This week, the reemergence of a 2023 bull signal has some people reflecting.
This year has seen two instances of the Moving Average Convergence Divergence (MACD) bullish crossover, which were both followed by at least 40% gains.
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The exponential moving average (EMA) of 26-period is subtracted from the EMA of 12-period to get the value of the Moving Average Convergence Divergence (MACD) indicator. This value’s nine-day EMA forms a “signal line.” Traders can decipher probable top and bottom signals for Bitcoin by comparing the signal line with the MACD value. This research aids in spotting potential trend reversals or Bitcoin price turning points.
The nine-day EMA and the MACD value are used to create the MACD indicator’s signal line, which aids in determining probable entry and exit positions in Bitcoin trading.
Crosses above and below the signal line represent bullish and bearish signs, respectively. Traders utilize it in conjunction with other resources to make well-informed choices.
A new milestone for Bitcoin difficulty
The fundamentals of the Bitcoin network are currently showing a strong bullish trend, with potential for new all-time highs. Mining difficulty is anticipated to rise by 2.5% on May 31st and surpass 50 trillion for the first time, demonstrating the intensifying rivalry and dedication among miners.
The hash rate, which gauges the amount of computing power devoted to mining, is also near its highest levels ever seen, underscoring the commitment and involvement of miners in the network.
According to data from Glassnode, Bitcoin miners are increasingly choosing to hoard and keep more of their earnings rather than sell them. This move towards hodling supports the market’s overall bullish attitude and shows that miners are growing more optimistic about Bitcoin’s long-term prospects.
The forecast for Bitcoin’s price and its ability to hit new all-time highs appears positive due to the strong network fundamentals, which include increasing mining difficulty, a record-breaking hash rate, and miners accumulating Bitcoin.
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Hodl trend mode
Monitoring of Bitcoin hodlers, who firmly refuse to sell and instead amass more BTC every day, continues to support long-term investors’ strong belief. As a result of this behavior, the supply of BTC that is available for purchase has decreased, bringing Glassnode’s “Hodled and Lost Coins” indicator to multi-year highs.
The total amount of these hoarded and misplaced coins is currently 7,725,079 BTC, which is the biggest amount since May 2018.
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This metric’s investors have held their BTC for 155 days or less, with an average cost base of $26,500, making it an important support area. This price level has so far been successful in maintaining Bitcoin’s value throughout current market turbulence.
Recent data shows a large increase in the number of Bitcoin wallets with a non-zero address in addition to the strong hodling activity. The sum currently reaches 47 million, showing an increase in the number of people and organizations involved in the Bitcoin ecosystem.
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Together, these indicators demonstrate the steadfast dedication of long-term investors, the declining supply, and the growing user base of Bitcoin. The potential for long-term price growth is further reinforced as Bitcoin’s scarcity keeps rising.