Bitcoin Trades At Crucial Support Of $26,500! Will BTC Price Make A Big Move Ahead?
As we approach the mid-year of 2023, the crypto market is once again at the edge of its seat, with Bitcoin (BTC) trading at a crucial support level near $26,500. Despite the ‘hot’ Personal Consumption Expenditures (PCE) data hinting at a potential June rate hike, Bitcoin is nearing $27K. The unexpected rise comes even as the PCE data, indicating persistent inflation, suggests a need for further financial tightening. Amid this, investors are confused to determine Bitcoin’s upcoming trend.
Bitcoin Bulls Show No Momentum
Bitcoin is at a pivotal juncture in terms of price action, with speculators holding the reins, according to a recent analysis. Checkmate, the lead on-chain analyst at Glassnode, shared his insights on Twitter on May 26, indicating a potential Bitcoin price standoff on the horizon.
As BTC price nears key trend lines, a growing number of long-term market players are becoming increasingly apprehensive this month. With bearish price forecasts on the rise, the focus of on-chain analysts is shifting towards short-term holders (STHs) as they try to predict the next direction of Bitcoin’s price.
Glassnode’s STH-SOPR metric, which assesses the profitability of spent outputs, is currently indicating a dominance of losses among short-term Bitcoin holders. This situation calls for dip buyers to enter the market. If this trend continues, it could potentially trigger a fear-of-missing-out (FOMO) bounce. However, if the short-term holder realized profit/loss ratio stays below 1.0 for an extended period, it could signal a bearish turn.
Moreover, the MVRV ratio is surging as it touches 1.31. A retest near 1.5 will become bullish for the BTC price to push it above the $30K level, as seen in the previous bull run. The MVRV ratio, comparing Bitcoin’s market cap to its fair-value model, can hint at its current valuation. A value above one suggests Bitcoin may be overpriced, while a value below one indicates it could be undervalued.
What’s Next For BTC Price?
Bitcoin is on the brink of breaching its tight range toward a lower value. It appears that the cryptocurrency markets are echoing the trends in the U.S. equities markets, which have experienced a two-day decline amid the uncertainty surrounding debt ceiling negotiations.
Bitcoin hit the 20-day EMA of $27,219 on May 24, but the bulls failed to break this resistance, leading to aggressive selling by the bears. The bears are now attempting to keep the price below the immediate support of $26,650. If successful, the BTC price could drop to the crucial support at $25,250, a level likely to see a fierce contest between the bulls and the bears. As of writing, Bitcoin trades at $26,786, gaining over 2% in the last 24 hours.
The 20-day EMA remains the primary resistance that the bulls need to overcome for a sustained recovery. A shift in the short-term trend could be indicated once the bulls push the price above this resistance line.