Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
- Bitcoin’s market structure has been bearish, but a move above $27.4k could change that.
- Traders should be cautious around $28k due to the possibility of a liquidity hunt.
From Bitcoin [BTC] The correlation with the S&P 500 turned negative in May. This meant that the index was generally bullish, but Bitcoin has been moving in the opposite direction in recent weeks. Growing hostility from regulatory authorities in the United States has played a role in BTC’s misadventures on the price chart.
Read Bitcoin [BTC] Price Forecast 2023-24
There was an argument that Bitcoin was showing some signs of recovery. Still, an analysis of the price action showed that the bias remained in favor of the sellers. On the other hand, if Bitcoin rises to $28,000, it could signal an uptrend.
Can the bulls then drive Bitcoin past $27.4k?
Source: BTC/USDT on TradingView
Bitcoin market structure on the daily time frame has been bearish. The structure shifted on April 21 as BTC fell below a recent higher low. Since then, the price has been lower on the chart.
In addition, the trading volume from April was extremely low compared to the volume in February and March. This was also reflected in OBV, which fell only slightly in May, in contrast to the rapid increases recorded in mid-March.
The Fibonacci levels based on the recent leg down show that Bitcoin was probably heading towards $24.8k. The extension level of 61.8% at $23.3k was also a target it presented. The price action showed that the $24.2k – $24.4k region could serve as strong support. Below that, the $22.4k and $21.5k levels were important.
To signal a bullish shift in the structure, Bitcoin prices must rise again above the recent low at $27.4k. Still, no uptrend would emerge there as BTC should form a higher low and stay higher. Cautious investors can wait for this turn of events before buying.
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A falling BTC supply on exchanges does not necessarily indicate an accumulation phase
Source: Sanitation
The dormant circulation saw a huge spike on May 7, but spikes haven’t been uncommon since then. The most recent on June 15 saw BTC drop to $24.8k. The active address metric has also improved over the past two weeks.
Supply on exchanges declined in response to users moving money into self-custody out of fear. The exchange rate balance also showed outflows outweighing inflows in recent days.