Bitcoin’s price experienced a dip below $27,000, leading analysts to warn of another test of the 200-week trend line. With Bitcoin’s bulls struggling and the cryptocurrency wicking to $26,640 on Bitstamp, market observers are keeping a close eye on key support lines, including the 200-week moving average (MA), currently at $26,400. This crucial support line has held firm since mid-March and is considered to be a last line of defense by some.
According to Keith Alan, co-founder of Material Indicators, a weekly candle close below the 200-week MA could be an indication that the bottom for Bitcoin’s price isn’t in yet. This could lead to increased volatility in the coming week, with the last line of defense identified as the 50-Month MA around $25.5k. Michaël van de Poppe, founder and CEO of trading firm Eight, also acknowledged the importance of holding the $26,600 price level. As the week progresses, the market will be keeping a close eye on how Bitcoin performs in relation to these support lines.
The upcoming United States Federal Reserve decision on interest rates, due on June 14, is also being seen as a potential “do or die” moment for Bitcoin. If technical support levels at key moving averages are lost, the next level of support would likely be around the 2017 top, which coincides with the trend line.
Observers have also noted an increase in open interest in futures markets, indicating that traders may be preparing for more significant moves in the cryptocurrency. Trading suite Decentrader pointed to a “significant increase” in open interest with long positions becoming more prominent before the Wall Street open. Data from CoinGlass showed liquidations impacting longs for June 5, resulting in cross-crypto position losses totaling $33 million at the time of writing.
As Bitcoin’s price hovers near crucial support lines, the market will undoubtedly be watching carefully as the week unfolds. With factors such as the Federal Reserve’s interest rate decision and exchange speculation playing a role, it remains to be seen how Bitcoin will fare in the short term.
Source: Cointelegraph
