Bitcoin (BTC) and the overall cryptocurrency market have been hit hard in recent days. Prices were already in a downward trend, but the terra (LUNA) fiasco caused a deep red coloring of the market.
Still, bitcoin was able to recover in the past 24 hours. The market is reacting somewhat relieved and sentiment is cautiously turning slightly more positive. Despite this, fear and uncertainty are still very high and bitcoin could still fall deeper.
Bitcoin price recovers by 10%
The bitcoin price arrived at $27,000 yesterday morning. Although bitcoin initially made a dip to $26,600, and on some exchanges even towards $25,000, this limit is still around $27,000.
Bitcoin then started to rise. The price initially encountered some resistance around USD 28,000, but was able to break through it yesterday afternoon. The USD 29,000 also offered resistance for a while, but bitcoin broke through there too by last night.
Bitcoin was then rejected around USD 29,800, but the price then held above USD 28,000 and was able to rise again. Bitcoin peaked at $30,885 this morning and currently stands at $30,300 on KuCoin and $29,000 on Bitvavo at the time of writing. As a result, the share price is up as much as 10% today.
Bitcoin investors are trying to hit bottom
It is possible that bitcoin has bottomed out around this USD 27,000 and is now beginning a recovery. Volume is finally starting to pick up in recent hours, possibly signaling a return of confidence.
Confluence Floor Model #Bitcoin #Crypto
May 13 | 0:00 UTC (Glassnode Daily Close)
Price | $29,100
Floor Model | $27,617 pic.twitter.com/rz0e05QLJv— Plan©️ (@TheRealPlanC) May 13, 2022
However, that is far from certain. To speak of a trend reversal, the price must first climb out of a very deep chasm. It is possible that around USD 32,000, bitcoin may already run into too much resistance and then resume its downward trend.
#BTC (4hr chart)
This would be a nice pattern. But we would still have resistance above
My assumption however is that we resume the channel. pic.twitter.com/4diPriYv4y
— John Wick (@ZeroHedge_) May 13, 2022
Then we may need to factor in a $24,000 test. It is noticeable that investors are currently trying to target exactly the bottom. Then it is usually almost impossible.
If you invest in the long term and still have full confidence in bitcoin, it makes little difference to hit the bottom. If you are less confident and/or trading in the short term, it may be wise to wait for a stronger sign of a trend reversal first. “Don’t catch a falling knife” is therefore a well-known saying for investors; prices can always fall further.
Today for a brief moment we touched the floor. #Bitcoin pic.twitter.com/5LfHpo8maP
— Root 🥕 (@therationalroot) May 12, 2022
Meanwhile, the futures market has finally cooled down, but unfortunately it was accompanied by a major crash. The open interest is currently at its lowest in seven months, a clear sign of uncertainty.
$BTC open interest hits a 7-month low
Live Chart👇https://t.co/08d4sJnk5N pic.twitter.com/adwuyEBQFb
— CryptoQuant.com (@cryptoquant_com) May 13, 2022
Despite this, large amounts of longs on Bitfinex and that may indicate a return of confidence:
#Bitfinex $BTC Longs have gone absolutely parabolic, nearly +50% above previous all time highs (July 2021).
An absolutely massive position, especially given recent movements.
Finex whale normally gets calls right, but this many longs unwinding would get nasty. pic.twitter.com/AI1YHmZsDg
— Decentrader (@decentrader) May 12, 2022
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Cohort based Realized price has proven to be one of the effective #Bitcoin price models historically
Macro levels that it provides are vital in the times of uncertainty
Here’s the run down
be safe everybody pic.twitter.com/7oq9CpeY6t
— whalemap (@whale_map) May 12, 2022