The bitcoin (BTC) market seems to be calming down after last week’s massive crash and the days before. Market sentiment is turning slightly less bearish, but fears still remain extremely high. Analysts are again very divided as to whether bitcoin has bottomed or will fall even deeper. How the price closes this week may be crucial.

Bitcoin price fell 16.5% this week

The bitcoin price touched $40,000 on May 5, but then began to plummet. A week ago, bitcoin already plunged below $35,000, dropping to a low of $26,600 on Thursday. Then bitcoin started to recover slightly.

Bitcoin briefly broke through $30,000 on Friday, but was then rejected around $31,000 and dropped to a low of $28,650 on Saturday. Bitcoin made a small bouncebut the price did not go beyond $30,300 last night.

Bitcoin dropped to $29,500 this morning and was able to recover slightly, but was just rejected at $30,000, dropping to $29,700 on KuCoin and $28,500 on Bitvavo at the time of writing. That is 1% above the price 24 hours ago, but still 16.5% below the price a week ago.

Important Weekly Close for Bitcoin

What price bitcoin closes this week may be crucial for the direction of the price in the coming time. If bitcoin holds up here, it could potentially retest $32,000 and then $34,000-$35,000. We would prefer to see bitcoin close above $30,000 this week.

However, should bitcoin fall, it is very important for $27,000-$28,000 to hold, otherwise there is a good chance that bitcoin will fall a lot deeper, possibly to $24,000. Some bears speak even already towards $20,000, under 200 days moving average.

The price direction in the near term will probably still largely depend on macroeconomic developments due to the high correlation. If traditional stock markets open in the red on Monday, there is a good chance that bitcoin will be pulled along again. The next Federal Open Market Committee (FOMC) meeting is in exactly one month and a further hike in interest rates could add more selling pressure.

Positive on-chain data for bitcoin

However, there are also positive signs for bitcoin. The day before yesterday, a significant inflow of BTC to exchanges took place, but analyst IT Tech noticed that a net outflow of 29,800 BTC took place yesterday. That’s a sign that some investors are already buying the dip.

Meanwhile, most older investors still seem to be holding onto their BTC tightly. That was different during the crash of March 2020, which was accompanied by the outbreak of the corona pandemic.

In the meantime, even 65.1% of the BTC supply has been held for more than a year and that solid foundation will be a bullish effect in the long term.

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