As the short-term outlook for Bitcoin (BTC) remains uncertain, traders and investors are holding their breaths ahead of the release of macroeconomic data. BTC/USD hovered below $28,000 on May 9, but saw some deeper losses the day before, dipping to $27,300 at its local bottom. While some traders anticipate the May 10 United States CPI data to bring much-needed volatility to the market, others remain skeptical about a short-term bullish reversal.
According to Michaël van de Poppe, CEO of trading firm Eight, the downward trend of Bitcoin continues as $27,800 has become a resistance level. He expects another dip before certain catalysts, such as the release of CPI, might cause an upwards swing. However, a bullish divergence in transaction volume is necessary to sustain any recovery.
Contrarily, some trading resources predict Bitcoin to face more bearish moves due to factors like excess optimism, a head and shoulders pattern, and bearish momentum. A confirmed breakdown of Bitcoin may result in a target price around the $24,000 region. Crypto trader Crypto Tony also voiced his concerns about the continuation of downside pressure on Bitcoin, marking $25,200 – $24,200 as his main targets for now.
On the other hand, on-chain analytics platform CryptoQuant suggests realized price clusters as potential support levels for Bitcoin. Using the UTXO Age Bands metric, it calculates the area around $25,600 to be a critical support level, which is the average purchase price of wallets that bought Bitcoin within the last 3-6 months.
While it is true that CPI data may move the market next week and trading insights suggest that Bitcoin might experience more bearish momentum, realized price data offers hope as well. It highlights potential support zones that traders can watch for any signs of upcoming reversal.
However, the conflicting perspectives regarding Bitcoin’s short-term price action highlight the underlying uncertainty in the market. To make informed decisions, traders and investors should be cautious and conduct thorough research while considering the varying opinions, indicators, and macroeconomic influences at play.
In conclusion, the future of Bitcoin’s short-term price direction remains a contentious topic. While certain factors, like the upcoming CPI data and realized price support zones, might prove beneficial, it’s essential for investors to tread carefully and consider all possible scenarios in the ever-changing world of cryptocurrency markets.
Source: Cointelegraph
