Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
- The $28k area had a confluence of resistance from multiple technical fronts.
- Aside from that, the $30k was also a bearish stronghold to watch out for.
On-chain stats showed increased selling pressure behind Bitcoin [BTC] in May, due in part to investors realizing their gains from previous purchases. However, the report noted that stock market supply has recently slumped, likely suggesting that selling pressure would not last.
Read Bitcoin [BTC] Price Forecast 2023-24
BTC price action showed that the $27.8k and $28.3k levels will be key resistances for bulls to beat. Bitcoin bulls should be cautious in retesting this resistance and may be bracing for a downward move based on the recent trend.
The market structure remained bearish and the $28k area could see significant resistance
Source: BTC/USDT on TradingView
In May, Bitcoin was in a downward trend. It started with a sharp drop below $28.7k on May 1, shifting the market structure to bearish. After this move, the price initiated a series of lower highs and lows.
One of those lower highs came on May 10 when Bitcoin bounced to $28.3k before falling to $25.8k on May 12. At the time of writing, the BTC bulls have flipped the $26.8k level to support again.
Still, they must force an H4 session above $28,330 to convert the bearish market structure to bullish. A bearish order block on the 4-hour chart was present in this area, highlighted in red.
We have seen reduced volatility over the past five days. The Directional Movement Index saw the ADX drop below 20, indicating that there was no strong trend.
On the other hand, the RSI stood at 57, while the CMF has been above +0.05 in recent hours, indicating significant inflow of capital into the market.
The indicators did not completely disagree, and the conclusion is that Bitcoin is not showing a strong trend in either direction at the time of writing.
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Open interest charts showed strong bearish sentiment over the past week
Source: Coin analysis
On May 17, when Bitcoin started to fall from $27.1k to $26.6k, Open Interest rose by nearly $220 million, according to data from Coinalyze. This showed intensely bearish speculators. In addition, the OI started falling as Bitcoin prices climbed back above USD 27,000, showing short coverage.
The spot CVD has been on a steady downtrend for the past week, but has started to level off over the past two days. This may not be enough to drive a rally, but it was something to be aware of.
