Bitcoin is showing strength after a correction that took it towards key weekly dynamic levels. Spot ETFs are showing very positive signals. Enough to validate a recovery towards new historic highs?
It is Monday, May 6, 2024 and the price of Bitcoin (BTC) is moving around $64,000.
The macroeconomic events of the past week have led to a calming of the market. From an economic point of view, the job market is showing signs of weakness following weaker growth than expected and this is not a good sign. This is potentially what the FED was waiting for to initiate a more accommodating policy, despite inflation beyond its objectives.
As a result, on Friday, the markets were showing signs of recovery. The opening this Monday should tell us the market’s decision and its direction while waiting for the next inflation figure scheduled for May 15.
In an emerald green market this Monday morning, is Bitcoin heading towards new highs, or on the contrary is it preparing a bullish trap?
📈 Surf the bull run by surrounding yourself with experts! Join us now at Cryptoast Research
Cryptoast Research: Don’t waste this bull run, surround yourself with expertsGrayscale ETF to buy for the first time since its launch!
| Pairs with Bitcoin | 24 hours | 7 days | 1 month |
| Bitcoin/USDT | +2.40% | +4.50% | -4.20% |
| ETH/Bitcoin | -0.50% | -3.50% | -0.10% |
May 3, 2024 is to be marked with a milestone: Grayscale’s Bitcoin spot GBTC ETF has aligned itself with purchase in a collective movement of positive entries.
Historical Flows for the Greyscale Bitcoin Spot ETF
On this day, with the exception of the spot Bitcoin ETFs from Wisdomtree and Hashdex whose net flow was zero, all ETFs had a positive balance. It is also a day that follows 7 days of negative flows, including a historic low recorded on May 1, 2024 with 563 million dollars (or approximately 9,290 BTC).
However, it is the behavior of Grayscale’s Bitcoin ETF that stands out the most. So far and since its launch, this ETF had an average daily sales balance of approximately $221 million. If this date were to mark a slowdown in this selling pressure, then a psychological and fundamental barrier could be lifted.
History of flows on spot Bitcoin ETFs
On the derivative market side, funding remains low in a market sentiment that seems to be balancing. Open interest also remains stable, stuck below $17.2 billion. A more speculative phase could be triggered if this resistance level were to break.
Metrics of derivative markets on Bitcoin
The liquidity map is changing significantly following the recent correction. Areas #5 at $60,000 and #6 at $58,000 have been cleared, leaving area #1 at $50,000 untouched. However, we can see an area below $56,000 building below the May 1 lows. However, it remains reasonable compared to the liquidity that can be found above.
Here are the new liquidity pockets classified by importance:
- #1 : $50,000;
- #2 : 71,000/74,000 dollars;
- #3 : $67,000;
- #4 : $56,000;
Bitcoin Liquidation Heatmap
BTC made a first move south by recovering liquidity below $60,000. It is common to see Bitcoin carry out liquidity hunting movements before relaunching in the opposite direction, particularly when this relaunch movement aligns with the underlying trend.
This point is positive for a continuation of Bitcoin, but we will have to be vigilant if speculative excesses appear. These could generate pockets of liquidity under prices leading to erratic movements.
BTC dominance retraces to 54%, while the ETH/BTC pair fell 3.50% over the week.
Last week I wrote: “ the current retracement can, however, be interpreted as a retest of the ascending right triangle exit zone. » This is a scenario that gains weight due to the reaction made by the 54%. This retest will nevertheless be validated in the event of a close above 55.70%, which would set the objective of a return to the red zone between 57 and 58%.
Exceeding 55.30% should also be taken into account as a first signal of strength for Bitcoin.
Chart of Bitcoin dominance on a weekly basis
👉 How to easily buy Bitcoin (BTC) in 2024?
Buy cryptos on eToroBTC very close to a return to its weekly range!
Strong positive reaction on the weekly 20 moving average which closes in hammer shape. This demonstrates buyer interest at this dynamic level, leaving a wick of 11% for $6,000 in amplitude. This movement could, given its strength, mean an imminent reintegration of the range in search of the opposite limit at $74,000.
If the strength of the movement is undeniable, the closure is nevertheless too close to the lower limit to validate the reintegration. If a deviation below the range seems most likely, the scenario of a retest before consolidating above $60,000 or even a downward break at the 20 weekly moving average is also possible.
In the current situation, the bullish camp must aim for the following objectives: a re-entry of the range (beyond $64,000) to settle there and a crossing of the 7-week moving average (in pink) to enter the zone of selling interest in which prices should encounter liquidity.
If the bulls manage to conquer this zone, then a new liquidity zone awaits them, one which will allow them to drive the asset to a new historic high.
Weekly Bitcoin price chart
However, let us not lose sight of the fact that a monthly bearish signal was delivered by the fall from March to April, that the range has not yet re-entered and that a lot of liquidity remains unvisited at $50,000.
This is not my preferred scenario given the underlying trend and the strength demonstrated in the short term. However, having only one scenario often presents a major risk for the investor: that of acting out of emotion.
To invalidate the bearish signal given by the April candle, the zone above which it will at least be necessary to reestablish itself and above which it will be appropriate to close at the end of the month is 66,000 dollars. This level represents 50% retracement of the bearish candle from April.
Bitcoin price graph in monthly
👉 Would you like to discover more technical analyzes on Bitcoin or altcoins? Join our premium Cryptoast Research group where we share altcoin analysis charts every week!
Cryptoast Research: Don’t waste this bull run, surround yourself with expertsIn summary, Bitcoin has been showing strength for several days, a hammer was formed on the last weekly candle, however there is still a little gas left in the rocket to validate a bullish recovery.
So, do you think BTC can already set a new price record? Don’t hesitate to give us your opinion in the comments.
Have a nice day and we’ll see you next week for a new analysis of Bitcoin (BTC).
Sources: TradingView, Coinglass, Glassnode
Newsletter 🍞
Receive a summary of crypto news every Monday by email 👌
What you need to know about affiliate links. This page may feature investment-related assets, products or services. Some links in this article may be affiliated. This means that if you buy a product or register on a site from this article, our partner pays us a commission. This allows us to continue to offer you original and useful content. There is no harm to you and you can even get a bonus using our links.
Investments in cryptocurrencies are risky. Cryptoast is not responsible for the quality of the products or services presented on this page and cannot be held responsible, directly or indirectly, for any damage or loss caused following the use of a good or service highlighted in this article. Investments related to cryptoassets are risky by nature, readers should do their own research before taking any action and only invest within the limits of their financial capabilities. This article does not constitute investment advice.
AMF recommendations. There is no guaranteed high return, a product with high return potential involves high risk. This risk-taking must be in line with your project, your investment horizon and your capacity to lose part of this savings. Do not invest if you are not prepared to lose all or part of your capital.
To go further, read our Financial Situation, Media Transparency and Legal Notices pages.
Analyst at Cryptoast Research for several years, I carry out in-depth monitoring of the crypto market to analyze the next narratives while keeping an eye on the financial markets.
Emmanuel Lazaro
10 items
