Over $65k back to extreme greed? 5 things to know in Bitcoin this week
Bitcoin (BTC) begins a new week with bullish sentiment on the radar as it returns to $64,000.
In a rousing comeback, BTC price action managed to leave the recent swing lows behind, gaining about $8,000 from last week's selloff.
Despite some gains over the weekend, they proved to have staying power, and in the May 6 Asian trading session, bears are unlikely to push the market back.
In the second week of May, the mood is very different – but the increase in greed is already visible.
Can Bitcoin and altcoins manage sustainable growth to all-time highs?
That's the question traders and analysts are asking after a trip to a two-month low, and it's a big one.
On the exchanges, things remain promising, funds rates are neutral, and there are few signs of interest in going long BTC at current levels.
But if things take a turn for the worse, they are the key support levels that come up for a new challenge. These include the short-term holding (STH) cost base and the 100-day moving average – both classic moving averages.
Cointelegraph takes an in-depth look at the current state of Bitcoin as the average trader recovers from a hair-raising start to the month.
Bitcoin beat the bulls after the weekly close
The weekend ultimately didn't pose any threat to Bitcoin bulls, providing some unexpected twists that ended the weekly close.
This came in at around $64,000 on Bistamp, according to data from Cointelegraph Markets Pro and TradingView – about $900 higher than at the end of April.
While not a huge weekly candle, the performance represented an impressive return to form for BTC/USD, which made a trip to $56,500 in the intervening period.
Unsurprisingly, market observers are quietly optimistic.
“It has wiped out all the liquidity that has built up over the past 2 months and below,” noted trader Dan CryptoTrades partially summarized in a recent commentary on X.
We're still in the big range, but at least we've got some progress over the next week.
Tony Severino, founder of crypto technical analysis platform CoinChartist, pointed out that there are similarities between last week's rapid fall and bull market.
Every high swing low since November 2022 has been a weekly hammer, he said over the weekend.
“Is this time different?”
In a previous post, Severino added that the price is trying to recover the upper monthly Bollinger Band – which has acted as support since February.
“This can be a positive development,” he pointed out.
Data from monitoring resource CoinGlass, meanwhile, saw BTC/USD gain 5.8% in May, keeping the overall second-quarter loss below 10%.
BTC price levels crystal
Crypto markets are very volatile and emerging trends can quickly fade, dragging sentiment down.
If Bitcoin sees a transformational change, traders and analysts will be interested to see how well nearby support levels succeed in limiting fresh weakness.
Michael van de Pop, founder and CEO of mTrading, is one analyst who emphasizes the importance of the $60,000 mark — although that level provided little comfort to the bulls last week.
“There's no bitcoin over $60k and retail here,” he told X followers about the lack of fanfare associated with the market's comeback.
As long as Bitcoin holds above $60K, this range is perfectly fine. Altcoins take off slowly.
As Cointelegraph continues to report, $60,000 corresponds to several trends, which open BTC/USD to a bull market in early 2023.
These include the 100-day Simple Moving Average (SMA) and the STH Confirmed Price – the basis for the total cost of entities holding coins for 155 days or less.
These two levels have been sitting at $60,650 and $59,920 since May 6, the latter figure provided by statistical input to Find Bitcoin.
In a research note on May 6th, financial analyst Tedtalkmacro added the 50-day Moving Average (EMA) to the mix.
“50D EMA stands at $64000 – where BTC is currently trading, regaining that level is important in defining the upper timeframe market structure,” he said.
“Momentum and trend traders pay attention to the 50EMA when visiting the trend.”
More US jobs data will cast a shadow on the dollar
The week ahead is relatively quiet when it comes to macroeconomic data, but recent events provide more than enough to keep traders occupied.
The latest US employment figures gave risk assets a big boost across the board late last week – something firmly on the crypto radar.
With the Federal Reserve expected to cut interest rates in the coming months, easing financial conditions is becoming a question of “when,” not “when.”
For van de Pop, there is a possibility that quantitative easing (QE) could be seen again – adding liquidity back to the Fed.
“A very valuable opportunity where most of the pain has gone in for Altcoins,” he argued.
“The coming week will be an interesting one, we will see some more upside moves for the dollar and bitcoin as Friday's negative economic data shows the way. QE is coming soon.
The strength of the US dollar weighed heavily on jobs data, with the US Dollar Index (DXY) falling to its lowest level since April 10.
The focus will be on jobless claims data ahead of the Fed's rate cut, which is on May 9.
The BTC price used ignores the rebound.
As Bitcoin nears $65,000, the atmosphere in the equity markets is calm – but depending on sentiment, this can change in an instant.
The current data shows the actual neutral funding rate for Bitcoin, which is a reflection of the speculations that are licking their wounds at each trading DecenTrader.
“Bitcoin funding has returned to a neutral position after going negative at the end of last week,” X's post confirmed.
“The dip below $60K has many traders worried before the price recovers.”
Others described the amount as “still healthy” after seeing a “huge reset” on the way to $56,500.
“Let's hope it stays this way for the next healthy hike,” added Diane CryptoTrades.
A look at the Crypto Fear and Greed index offers potential food for thought. Along with BTC's price recovery, it has recently bounced back from “neutral” to “greedy” to “extremely greedy”.
The index, a late indicator, is currently at 71/100, up from just 43/100 on May 2.
The mining crisis is due to a record high recession.
$64,000 is not enough to allow Bitcoin to fall out of trouble on the next May 9 automated correction.
Related: Bitcoin reaches one billion transactions
The secondary correction of the new crisis period is currently predicted to be around 1.3% lower, according to the monitoring data source BTC.com.
However, difficulty is at an all-time high, with miners halving their block grant in April, a feat measured in hashrate, raw data from MiningPoolStats confirms.
Last week, Cointelegraph reported on the continued resistance of miners, despite the market volatility, which did not show signs of capitalization.
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
