Will $37,000 hold for more upside in the near term for Bitcoin?
Bitcoin (BTC) prices pulled back on May 25, wiping a small portion of the gains it had made during the previous session amid another day of volatile trading.
The BTC/USD exchange rate fell up to 6.11% after opening the Asia-Pacific session at $38,856. The pair met a strong resistance force near its 200-day simple moving average (20-day SMA) that prompted a majority of traders to secure their intraday profits.
As a result, the bids for the BTC/USD pair started dropping while heading into the early London session, eventually finding support at a level that was instrumental in limiting the market’s bearish trend during the last week’s price crash.
Rekt Capital, a pseudonymous cryptocurrency trader, called the blacked horizontal line in the chart above — roughly $37,000 — a “key retest” level, noting its significance in determining Bitcoin’s short-term market bias.
The analyst put a blue arrow above the support level that pointed north, stating that he anticipated BTC/USD to bounce back in the coming sessions.
“Bitcoin turns $37,000 into support in the short-term,” tweeted Rekt Capital. “But might need to retest that area once again given how strong yesterday’s Daily Close was Still on track for following the blue path.”
The statement appeared as Bitcoin continued its whipsaw trend, logging sudden intraday reversals of high percentage margins. The choppy price movements reflected an absence of clear directional bias among traders, especially as analysts weighed equally convincing bearish and bullish catalysts against one another.
Will Bitcoin crash further? The opinions differ
Victor Dergunov, the founder of Albright Investment Group, admitted that he was buying the Bitcoin price dip, adding that he expects the cryptocurrency to at least reach the $40,000-$42,000 area in the near term.
“There was enormous volume leading up to and right around $30K, which is what we want to see at the epicenter of the correction process,” Dergunov explained in his note.
“Next, we see a retest attempt, at around $31K, but volume is notably weaker than during the initial drop.”
Offsetting Dergunov’s bullish opinion was portfolio management and analytics firm, the Income Generator. It said the Bitcoin market risked facing the “worst crypto winter” in its twelve-year lifetime, citing the U.S. dollar’s bullish response to rising inflation figures that could sap investors’ appetite for the cryptocurrency.
“It now seems as though rising inflation levels might actually work in the opposite direction and bring renewed buying activity back into the U.S. dollar,” Income Generator said in a note.
Meanwhile, Mike McGlone, the senior commodity strategist at Bloomberg Intelligence, reiterated his bullish stance on Bitcoin, noting that he still sees the BTC/USD exchange rate hitting $100,000 on the prospects of a declining supply rate.
“Bitcoin has backed up for reasons that support an extended bull market and a path to $100K,” he said.
“A bit hot in April, a primary factor cited for the crypto’s correction — excessive energy use — represents the strength of the world’s largest decentralized network, and getting greener.”
With “greener,” McGlone cited Elon Musk’s proposal to create a mining council in North America that could track and subsidize Bitcoin’s carbon emissions.
The Tesla CEO was instrumental in crashing the bitcoin prices from $59,000 to as low as $30,000 over the past few weeks. He criticized the cryptocurrency for its potential environmental impact and discontinued accepting it as payment for Tesla’s electric vehicles.