Bitcoin fundamentals are exploding forward as May draws to a close. However, traders remain undecided on BTC price strength. In this environment, we have prepared for our readers 5 things to know about Bitcoin and altcoins this week.
Debt ceiling deal coming soon
Negotiations continued for several weeks between Republican and Democratic lawmakers. After that, the Joe Biden administration created a solution to the US debt ceiling debacle. Now he has presented it to Congress. It is not yet clear whether the resolution will pass through Congress. However, bets are already focused on the outcome. It’s almost certain to be accepted, according to Jeremy Siegel, a professor of finance at the University of Pennsylvania.
Others say a real doomsday scenario is unlikely. Because they state that stopping the agreement at this point will not immediately drag the USA into a default scenario. “Next week, uncertainty will remain about the debt ceiling as the deal passes Congress,” trading firm Mosaic Asset said. Meanwhile, the news about the deal itself had an instant magic effect on the lackluster BTC. Thus, the classic weekend volatility briefly reached $28,450 overnight. Bitcoin is trading just under $28,000 at press time. The crypto managed to improve its outlook, albeit with regard to the weekday trend. Popular analyst Rekt Capital comments:
Here is a really good BTC weekly close. BTC lost ~$27,600 as support two weeks ago. Now positioned to retest/return the same level.
The analysis also raised the possibility of invalidating the recent head and shoulders pattern on Bitcoin’s daily timeframes, which is typically associated with the onset of a long-term bearish phase. “BTC is in a very early Bull Market,” Rekt Capital adds.
CME gap drives Bitcoin price drop bets
However, it is fueling the BTC debate as the bulls come closer to testing the top of a stubborn multi-month trading range. This week, too, those who bet on the downside have been caught literally short. According to CoinGlass, short traders liquidated $44 million in positions on May 28 alone. This represents the highest level in a month.
However, for prominent market participants, there is still reason to remain conservative about what comes next. Analyst Skew notes that Bitcoin’s weekend rally has opened a gap in CME futures, and BTC must go bearish to “fill” that gap at the open. “It may see a sell off after the debt ceiling deal and then gold/BTC go for a run before the final carpet,” the analyst says.
Other analyst Mark Cullen states that the bid liquidity of around $25,000 has shifted upwards with traders looking to fulfill their buy orders. According to the analyst, a turn towards this level is on the table. Meanwhile, trader Daan Crypto Trades says the battle to keep up is still going on. He also notes that there is still a “key” level of resistance to be earned.
A new milestone for Bitcoin difficulty
cryptocoin.comAs you follow, the trend in terms of the fundamentals of the Bitcoin network is as steadily upward as at any other time this year. Also, this trend is near all-time highs. According to data source BTC.com, mining difficulty will increase by 2.5% on May 31. Thus, it will exceed 50 trillion for the first time. When we add the hash rate to the equation, the picture of miners’ belief and competition becomes clear.
As analytics firm Glassnode noted last week, miners are earning more BTC than they sell. Thus, he returned to the holding, increasing overall BTC balances. Glassnode said, “After the massive Bitcoin outflow in the FTX boom, Miners expanded their balance sheet by +8.2k BTC. In this way, he increased his holdings to a total of 78.5 thousand BTC,” he explained.
Meanwhile, William Clemente, head of crypto research firm Reflexivity Research, compared the current trend between hash rate and spot price to Bitcoin’s price recovery in 2019.
Bitcoin hodl trend is in “only up” mode
Long-term investors refuse to sell. Plus, they’re throwing away more and more supply every day. So, Bitcoin hodlers cause a few surprises. Dedicated buyers posted Glassnode’s “Hodled and Lost Coins” metric to multi-year highs. For this reason, the number of BTC that can be purchased is gradually decreasing. With “Hodled and Lost Coins” 7,725,079 BTC, this is currently more BTC than ever since May 2018.
Those investors who have held BTC for 155 days or less currently have a cost base of $26,500. This makes this level a key support zone. Additional findings show that the number of Bitcoin wallets with non-zero addresses has risen to over 47 million. This reveals that these wallets are more than ever before.
MACD crossover possible to gain 50 percent
The reversal of the bull signal for the new year gives some pause to think about this week. The moving average convergence divergence (MACD) has recorded at least 40% gains twice this year. This type of ascension has witnessed another similar event. Analyst Captain Faibik confirmed the move, which occurred on May 27.
The MACD subtracts the 26-period exponential moving average (EMA) from its 12-period equivalent. The nine-day EMA of the result creates a “signal line” that presents a kind of Bitcoin upper and lower signal when compared to the MACD value.
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