Bitcoin (BTC) slipped back below $27,000 at the end of May, wiping out the weekend’s gains and marking a 7% decline for the month. The lackluster close left some traders disappointed, and market analysts pointed to the CME futures gap for a potential explanation. The closing of this gap was seen as a potential bottom for the market, with an anticipated breakout to $30,000 soon after to complete a “falling wedge” pattern with reduced volatility.
While some are optimistic about the near-term prospects for BTC, other traders are taking a more cautious approach, waiting for the market to show a clearer direction before making any trading decisions. In this regard, one such trader mentioned that there was “confluence at the $26,750 region with the CME gap, as well as the Golden Pocket on the Fibonacci retracement,” but chose not to enter any trades at that time.
The largest cryptocurrency by market capitalization is currently down 5.5% in Q2, in stark contrast to its impressive Q1 gains of over 70%. According to trading suite Decentrader, the market is showing “moderately bearish” or “declining” signals on multiple timeframes, with downside support levels tied to key moving averages (MAs) such as $26,250, $26,000, and $23,035 for the 200-week, 20-week, and 200-day MAs, respectively.
Despite the mixed outlook, market observers remain cautiously optimistic. One such observer noted that “liquidity wise, Bitcoin is still straddling. Downside is currently protected by the 200WMA. Upside, all meaningful liquidity is above $30k.” This statement suggests that there is potential for an upcoming bounce, but also acknowledges that there are significant hurdles to overcome before a decisive move can be made.
In summary, the end of May saw Bitcoin’s price dip as it closed the CME futures gap, but there remains a level of skepticism surrounding the market’s direction. Some traders remain hopeful for a breakout towards $30,000, while others are adopting a wait-and-see approach. As the market continues to straddle key liquidity areas and moving averages, investors would do well to keep a close eye on developments and conduct thorough research before making any trading decisions.
Source: Cointelegraph
