Bitcoin (BTC) was able to recover slightly last night. However, the price is still in the same tight range while fear and uncertainty in the cryptocurrency market and traditional markets are very high. It is therefore questionable whether bitcoin has the momentum to climb out of this range quickly.
Bitcoin Fear and Greed Index is 11 — Extreme Fear
Current price: $29,596 pic.twitter.com/hVUCiovfSQ— Bitcoin Fear and Greed Index (@BitcoinFear) May 25, 2022
Bitcoin price rises by 2%
The bitcoin price was again rejected on Monday at $30,500 and then fell towards $29,000. The price initially held above $29,250, but made a dip to $28,750 late yesterday afternoon.
Bitcoin then immediately made a rebound, but failed to break $29,500 straight away. That was successful by midnight, and bitcoin briefly peaked above $30,000 early this morning, peaking around $30,175.
This morning, however, bitcoin fell slightly again and the price currently stands at $29,800 on KuCoin and $27,900 on Bitvavo. This means that the BTC price is 2% in the plus today. That means bitcoin is still stuck in the same range.
#Bitcoin reached 30.6k
Clearly in a defined sideways zone for now https://t.co/pyWdZtxBOf pic.twitter.com/ZgQGeLkE1j
— Matthew Hyland (@MatthewHyland_) May 24, 2022
Bitcoin correlation with DXY and SPX
Stock markets like Nasdaq and S&P 500 did turn red yesterday, suggesting further decoupling, although correlations are still very high. DXY rose slightly, but the price is currently approaching resistance again.
Analyst Caleb Franzen notes that when DXY rose sharply in April, SPX fell twice as much and BTC as much as five times as much. However, since DXY has been falling for the past two weeks, SPX and BTC have barely reacted. According to the analyst, this may mean that investors in risky markets do not yet believe that DXY’s downward trend will continue, although he admits they could be wrong.
Market dynamics from 3/31 to 5/12:
• US Dollar Index $DXY +7%
• S&P 500 $SPX -14.5% (2x inverted to $DXYâ€
†#Bitcoin -38% (5x inverted to $DXYâ€Dynamics since 5/12:
†$DXY -3%
†$SPX +0.3%
†#Bitcoin +2%Risk assets aren’t responding to $DXY the same way to the upside.
— Caleb Franzen (@CalebFranzen) May 24, 2022
In any case, there seems to be a good chance that bitcoin will only really have room to rise again when the macro looks healthier again. Then you may need to quantitative tightening (QT) policy of the Federal Reserve is softening and that may require inflation first. The minutes of the most recent Federal Open Market Committee (FOMC) will be released later today, which may provide more insight into this policy.
Where is the bitcoin bottom?
In the bitcoin world, of course, there is currently a discussion about where the bottom of the BTC price is. Analyst Ali Martinez reports that 8.36 million BTC are now in loss. The last three times this offering has surpassed 8.61 million BTC signaled the end of the bear market.
#Bitcoin total supply in loss signals that a market bottom is getting closer.
Indeed, the last three times more than 8.61 million $BTC were in loss, it marked the end of the bear market.
Currently, 8.36 million #BTC are in loss… 👀 pic.twitter.com/K1diw1sK9w
— Ali Martinez (@ali_charts) May 25, 2022
Analyst Rekt Capital reports that historically bitcoin usually bottoms around 200 weeks simple moving average, although the rate can still be a wick or dip more than 14% below it. The 200-week SMA is currently around $22,000 and a 14% dip from that price would take the price to $19,000. That does not necessarily mean that bitcoin will actually fall that low.
historically, #BTC tends to bottom at or below the 200-MA (orange)
The 200-MA thus tends to offer opportunities with outsized ROI for $BTC investor (green)
Wicks below it are the point of peak opportunity
So how much does BTC wick below the 200-MA?
a thread#Crypto #Bitcoin pic.twitter.com/b3TLfsafUe
— Rekt Capital (@rektcapital) May 24, 2022
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#Bitcoin Yearly Moving Averages
I was experimenting with some longer range averages and found this view interesting… pic.twitter.com/832j4PAeum
— OnChain College (@OnChainCollege) May 25, 2022