Bitcoin (BTCUSD), the flagship cryptocurrency, faced a turbulent April, marking its first monthly loss of the year with a staggering 15% decline. However, May has brought a breath of relief, with Bitcoin rebounding by 4.24%.
The excitement that followed the SEC’s approval of a Bitcoin ETF earlier this year has waned as macroeconomic factors once again take centre stage in driving prices. April’s downturn coincided with a strengthening Greenback and increased demand for safe-haven assets amidst geopolitical tensions. Initially supported by robust economic data that challenged rate-cut expectations, the Greenback surged.
Yet, recent indicators of a weakening labour market, coupled with growing jobless claims, suggest a shift in sentiment. Expectations of diminishing inflationary pressures and potential rate cuts have reignited risk appetite, reflected in Bitcoin’s recent gains. As Bitcoin navigates this uncertain terrain, the question looms: will it sustain its rebound or succumb to prevailing selling pressures?
Technical
Bitcoin’s recent price action reflects a nuanced interplay of technical indicators and market sentiment. Converging with its 100-day moving average, Bitcoin signals a potential shift in sentiment following a downtrend.
Amidst this price action, the cryptocurrency discovered support at the 56555.00 level amid oversold RSI conditions, prompting a rebound and convergence with the moving average. However, encountering resistance at the 65523.44 level amid overbought RSI conditions led to a downturn. Retracing towards the 50% Fibonacci Retracement level, Bitcoin found intermediate support, prompting a bullish reversal.
As traders monitor these dynamics, attention turns to key levels. Upside momentum may lead to a retest of the 65523.44 resistance level, while the 50% level could act as a point of interest to the downside if bearish pressures resurface.
Summary
Bitcoin’s rebound from April’s losses hinges on a delicate balance of technical indicators and market sentiment. With the cryptocurrency converging with its 100-day moving average and finding support at the 56555.00 level, attention remains on key resistance at 65523.44. Traders await cues to determine Bitcoin’s direction.
Sources: Reuters, TradingView
Piece Written By Nkosilathi Dube, Trive Financial Market Analyst
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