The Bitcoin (BTC) price experienced an expectation-defying ups and downs in the first weekend of May, rising over 12.5% to over $64,000. This unexpected rise was fueled by a number of positive factors, including the US Federal Reserve’s decision to maintain interest rates and encouraging US employment data. But analysts are divided on whether this is the start of a sustained bull run or a temporary reprieve before another pullback.
Weekend spark triggers Bitcoin price surge
The price increase over the weekend was attributed to several important events. First of all, the US Federal Reserve’s commitment to keep interest rates constant throughout 2024 instilled confidence in the market. Low interest rates often mean increased investment in riskier assets like Bitcoin. Additionally, positive US employment data indicating a decline in unemployment claims further supported the cryptocurrency’s ongoing recovery.
While the recent surge is certainly a positive sign, technical analysis suggests that Bitcoin could be subject to a short-term correction in May. The price is currently trading near the 50-day exponential moving average (EMA), which is an important indicator for measuring momentum. A clear close above this level could push Bitcoin towards $69,650. However, failure to break this resistance may lead to a period of consolidation or even reversal. In this scenario, the next potential support level lies around $60,500.
Analysts have different opinions
The analyst community is divided on the future course of Bitcoin. Some, like SHIB Knight and Steph is Crypto, remain optimistic and predict a long bull run with targets reaching as high as $100,000. They point to technical indicators such as bull flag setups and RSI breakouts as evidence of an uptrend.
But others remain cautious. The Bitcoin Net Unrealized Profit/Loss (NUPL) metric shows that a significant portion of Bitcoin holders are enjoying significant unrealized gains. Historically, such high NUPL values have often preceded price corrections. Additionally, the formation of a bullish head and shoulders pattern could cause Bitcoin to drop to $60,000 before potentially reaching new highs.
Emphasis on CME gap for Bitcoin price
However, Daan Crypto Trades warned against adding to green candles over the weekend, emphasizing the importance of patience and observing how the charts play out. It also highlights the existence of a “gap” between the BTC/USD price and the CME Group Bitcoin futures closing price; This gap is one that BTC/USD tends to fill later.
Credible Crypto, on the other hand, suggests two possible outcomes for the current BTC price movement, with the current space remaining relatively illiquid. He sees two scenarios: Either Bitcoin maintains local highs and continues through major resistance, allowing it to fill open positions in altcoins, or it fails to sustain the recovery and suffers an early crash, creating ideal short zones for most altcoins.
Keith Alan, co-founder of trading resource Material Instruments, warns that a correction could easily come thanks to weak order book liquidity. He emphasizes the need to replenish bid liquidity for the uptrend to continue, otherwise it will not take much time to recover from weak liquidity.
What should we pay attention to in the market?
Investors need to watch several important factors in the coming weeks. First of all, will Bitcoin rise decisively above the $64,895 resistance level? Second, will the NUPL metric show signs of decline, indicating a potential correction? Finally, will the inverse head and shoulders pattern be confirmed, potentially leading to a short-term decline followed by an uptrend?
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