Bitcoin (BTC) is maintaining its support at $60,000 as sentiment in the market remains uncertain. The price of BTC is currently trading within a narrow range, but what could cause a significant change in its pace?
This week is expected to bring volatility to the cryptocurrency market. The release of United States macroeconomic data, along with comments from Jerome Powell, the chair of the Federal Reserve, could create an explosive mix for risk assets.
Bitcoin bulls have a lot at stake, even within the established trading range. The market has already hinted at a deeper correction, and traders are preparing for potential levels that could come next. One area of focus is bid liquidity below $50,000, which could serve as an attractive zone for a longer-term market bottom. However, in the shorter timeframes, BTC/USD seems more focused on clearing liquidity to the upside as the week begins.
The current state of BTC/USD performance is as follows:
BTC price: $60,000 is key
Bitcoin closed the previous week without much fanfare, indicating that it is still firmly within familiar territory as the new week begins. The lack of volatility in BTC/USD has been evident in the charts.
The $60,000 support level has held since its reclamation on May 3, and many see this level as a crucial line in the sand for the bulls. Popular analyst Mark Cullen pointed out a “bullish order block” of bidder interest just below $60,000, emphasizing Bitcoin’s ability to hold above this level and break the downtrend.
The $60,000 zone represents more than just bids. Key moving averages and other support trendlines for the bull market have converged at this level, making it a significant area of interest. Traders have also noted the “bull market support band,” formed by two exponential moving averages (EMAs), which has provided support for BTC/USD.
Recent data from CoinGlass shows a new block of bids worth $65 million placed at around $60,250. At the same time, there is ask liquidity waiting above $62,000, which could become the next battleground for spot prices.
CPI release and Powell’s speech
This week, all eyes are on the macroeconomic developments in the United States. The Consumer Price Index (CPI) release on May 14 will be a highlight, as it will shed light on the inflation debate and the possibility of interest rate cuts.
Before that, on May 14, the Producer Price Index (PPI) for April will be released, along with a public speaking appearance by Fed Chair Powell. Powell’s remarks on the economy have a significant impact on the market, as they provide hints about future policy moves. Traders are closely monitoring his tone for any indications of potential rate cuts.
The latest data from CME Group’s FedWatch Tool shows that traders see a low likelihood of a rate cut at the Fed’s next meeting in June, with the likelihood increasing substantially in September.
Long-term holders accumulating BTC
On-chain data indicates that long-term Bitcoin holders (LTHs) are increasing their exposure to BTC after distributing their holdings throughout 2024. This trend is similar to what was observed during the mid-2021 bull market.
Long-term holders see the current low price of Bitcoin as an opportunity to accumulate more coins, which they can reintroduce to the market during hype phases. This positive development suggests confidence in Bitcoin’s long-term prospects.
Funding rates reset across crypto
The current picture in derivatives markets shows a neutral stance towards Bitcoin and altcoins. Funding rates, which indicate the cost of holding positions in futures contracts, are currently neutral regardless of short-term price movements.
This is a significant shift from the overheated funding rates seen during Bitcoin’s trip to all-time highs in March. The current reset in funding rates indicates a slower market that goes through cycles of breakout, overheating, and reset.
Fear and indecision in the market
While Bitcoin’s price remains within an established range, there is already volatility in other areas of the cryptocurrency market. The Crypto Fear and Greed Index, a market sentiment gauge, has been fluctuating between different states this month. Currently, it stands at a fairly neutral reading of 57/100, contrasting with the extreme greed seen on May 6.
Research firm Santiment has also noted a drop in Bitcoin on-chain activity, attributing it to “fear and indecision” among traders. On-chain actions have reached levels last seen in 2019, indicating a slowdown in transactions since Bitcoin’s all-time high.
In conclusion, Bitcoin’s price is maintaining its support at $60,000, with traders closely monitoring macroeconomic data releases and Powell’s speech for potential market-moving events. Long-term holders are accumulating BTC, and funding rates in derivatives markets have reset, indicating a neutral stance. While volatility remains low within Bitcoin’s trading range, there are signs of fear and indecision in the broader cryptocurrency market.