The price of Bitcoin, the main cryptocurrency (BTC), dropped to $ 9,540 this Thursday, down 2.59%, from $ 10,000 when it was on the right track
Ethereum (ETH), the second largest cryptocurrency by market cap, fell slightly 1.72% and retests the critical $ 200 level, while XRP also tries to maintain a key $ 0.20 level.
24 hour market view for cryptocurrencies. Source: Coin360
The weekly Bitcoin candlestick chart shows that trade is currently above the temporary resistance of $ 9,300 after nearly 20% of last weekend’s rapid sales were caught up as support was found near the median of 20 weeks of cell phone.
The moving average for convergence / divergence (MACD) shows the upward momentum and the reversal of the upward trend since the sale in early March.
Volume remained above the weekly average, pulling down two and a half trading days, underscoring the optimistic response to Bitcoin’s return to $ 9,000 after falling before the sale last week
In the event that the bulls break the resistance by $ 10,000, a relatively quick attempt to test $ 11,500 and half of the previous range would be the goal, although Bitcoin has not traded at these prices since August 2019.
BTCUSD weekly chart. source: Trade view
The daily chart shows that after a sudden drop as the price approached $ 10,000, the BTC / USD finds some support today at the $ 9,300 level. In other words, Bitcoin was at a lower daily high.
Last week, the 100- and 200-day moving averages (MA) acted as the first line of defense alongside the 20-week MA. The 50-day average is on track to exceed the 100- and 200-day averages before the end of the month.
The so-called “golden cross” typically indicates to the market that it is expecting higher prices and will be positive for Bitcoin bulls. However, bitcoin has a tendency to initially react negatively to this bullish signal.
BTCUSD Weekly Chart Source: Trading View
The MACD on the daily chart shows that it threatens to go above zero, which means that Bitcoin generally remains on its upward trend. However, like the RSI, there are signs of weakness within the uptrend as resistance at $ 10,000 has been confirmed.
The On-Balance Volume Indicator (OBV) also shows an upward loss in the trend of accumulated volume. The indicator bears the scars of the high volume distribution of the past week and still has to find the volume to regain the upward trend.
4 hour chart. Source: Commercial view
4 hour chart
The four-hour chart highlights the potential weakness described in the one-day chart in more detail. The volume on the last day peaked at $ 10,000, but the price is still above the key resistance, which is very positive.
However, the four-hour MACD clearly shows the drop in momentum, which is also supported by the downward-moving Stoch-RSI. Both point out that consolidation may be required to reset the indicators.
As we near the end of Friday’s CME, traders may be trying to reduce the risk, especially given the sell-off on stock exchanges last weekend. The price action on Friday can therefore be representative of this.
If there was another sale over the weekend, the $ 8,900 checkpoint would be the first to show real buying interest as the bulls have trouble breaking through the week all week.
BTCUSD diagram for 4 hours. Source: trade view
A quick look at a combined order book that shows large buy and sell orders as a heat map in the graphic below shows that there is great sales interest around the $ 10,000 level, which effectively limits the price per order now.
BTCUSD diagram for 4 hours. Source: Bitcoinwisdom
Basic mood of the market
Bitcoin’s future price advance curve remains constant. The future price is around 1% above the current spot price of the contracts ending in July.
This has increased steadily in the past few weeks and shows a more positive outlook for the Bitcoin price in the coming months. However, the 1% premium on the future price is very low compared to previous ones, indicating that it wasn’t very bullish, suggesting traders are more cautious this time around.
Listed BTC futures / perpetual swaps. Source: Aslant
The CME futures chart shows that outstanding interest (unsettled derivative contracts) is at its highest and exceeding $ 500 million, with interest rates actually rising since settlement in March, significantly higher than other notable highs of $ 10,000 and $ 14,000 in 2019.
In general, open interest, which increases with price, is a positive sign as more money and attention get to the market.
As we have already seen, the particularly high level of open interest in CME and other Bitcoin derivatives exchanges soon had an inverse relationship to the price.
Therefore, this rise in CME is of particular interest as it has risen at a critical point of resistance, indicating that an explosive outcome can result if the market determines which direction it wants to move.
CME Bitcoin futures interest. Source: Skew
An analysis of the Crypto Fear and Greed index shows that the market remains in a state of fear after recovering from an understandable extreme fear that was a low of $ 4,000 in March.
Although it has recovered significantly, market sentiment clearly reflects that of the future market by showing a conservative price perspective.
The Crypto Feat Greed Index. Source: Alternative.m
Look into the future
Of course, interest in the Bitcoin market has continued to gain ground and primarily contributed to the fact that the price of Bitcoin has recovered quickly in the past few months. This is encouraging for the market as it shows that there are ample mechanisms to allow liquidity to enter.
Many of the new entrants rely on Bitcoin as a safe haven, about which there are still some debates. This is therefore confirmed at the open interest level. The next two weeks and the end of May will be critical for the market where bulls and bears will continue to fight for the $ 10,000 level, with $ 9,300 being a critical level for bulls to stand out.
Bears that have had around $ 10,000 bitcoin short positions in the past are likely to try to bring prices back down to $ 6,500, which would be expected with a bullish resistance of $ 8,000. While surrendering down would likely cause Bitcoin to drop back to $ 11,500 very quickly.
The views and opinions expressed here are solely those of author and do not necessarily reflect Cointelegraph’s views. Every investment and every trade step involves risks. You have to do your own research when making a decision.