Bitcoin is trading between $27,000 and $28,000. However, traders are still wary of a full correction. Meanwhile, the number of short positions in BTC is increasing. So what’s next for the biggest cryptocurrency? What do these data point to? Here are the latest developments in the Bitcoin market and the expectations of analysts…
Bitcoin shorts are on the rise
The data showed BTC/USD lowering volatility after moving around the weekly close in a last-minute surprise. As we have also reported as Kriptokoin.com, the US markets were closed yesterday due to the Memorial Day holiday. Meanwhile, crypto markets were quieter. Traders were waiting for Congress to vote on the proposed deal to extend the US debt ceiling. Meanwhile, Bitcoin, which rose 4.4 percent over the weekend, failed to convince everyone that the bulls may now have the upper hand.
The statements of popular trader Crypto Tony, who uploaded a potential BTC price roadmap to Twitter, drew attention. The analyst considers a return to $23,000 “still very likely”. “If we close below $27,500, I will close my long position and open a short position,” he told his followers.
Trading platform DecenTrader also noted that on May 28, short positions increased despite more positions being liquidated on any day in a month.
The #Bitcoin Long/Short ratio has been declining as price has gone up.
This suggests a lot of retail traders on Binance are adding shorts. https://t.co/tWYEfdrggr pic.twitter.com/DjG2EIKRUp
— Decentrader (@decentrader) May 29, 2023
Is the uptrend reasonable?
Material Indicators cautioned against treating the rise as fake though. Material Indicators analyst said, “I think the Bitcoin jump we’ve seen over the past few days comes from the underlying technical support at the 200-Week MA. “I also believe the rise makes sense for a number of reasons, including the announcement of the debt ceiling deal,” he said.
Material Indicators pointed out that the 200-week moving average is still acting as support, one of the few such support points near $26,000 on traders’ radar. An accompanying chart shows the Binance BTC/USD order book where increased bid liquidity entered $27,000.
US dollar working overtime
Despite the Wall Street holiday, the strength of the US dollar continued to move. Generally, the strengthening of the US dollar meant the decline of cryptocurrencies. However, it is noteworthy that cryptocurrencies do not face any serious problems at the moment. So with the current trend making an exception, Bitcoin prevented the US Dollar Index (DXY) from reaching 104.5, the highest level it has seen since mid-March. Regarding the index, Crypto Tony said, “The dollar has bounced nicely since it double bottomed in April. My area of resistance that I expect us to reject comes in at 105.80. I expect a strong dollar over the next few months. However, there is a possibility that this will extend into next year as well.” says.
Bitcoin analyst DonAlt: We are only in the process of stalling
Despite facing resistance at $30,000, Bitcoin surprised market watchers with its resilience during the ongoing consolidation period. DonAlt emphasizes that the failure of bearish forces to push prices further is an encouraging sign for Bitcoin bulls. This sustained consolidation around $30,000 this time points to a different narrative. DonAlt presents an interesting model based on previous market cycles. Large price peaks often exhibit large fluctuations and rapid movements.
In the current scenario where Bitcoin enters a period of consolidation after a crash, DonAlt sees this as a potentially optimistic indicator. Rather than a definite downtrend, this consolidation phase could mean a small pause. DonAlt’s evolving perspective on Bitcoin’s trajectory stems from his meticulous analysis of market dynamics. He believes that each week without a significant recession strengthens his bullish outlook. This growing belief leads Bitcoin to consider going completely bullish if its price shows an upward momentum.
The longer the consolidation lasts without a breakout, the weaker the argument for a downtrend. DonAlt expresses his intention to start accumulating Bitcoin with a sign of strength as he moves cautiously through bullish waters. While he acknowledges that it may take time for market movements to align with the expected direction, he believes that the longer the consolidation phase lasts, the less likely a collapse will be.
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