Bitcoin (BTC) starts a new week carefully preserving $60,000 support as sentiment walks the line between bullish and bearish.
BTC price action is sticking tightly to a narrow trading range — what could cause a dramatic change of pace?
This week is as good a time as any for crypto market volatility. United States macro data will combine with commentary from Jerome Powell, chair of the Federal Reserve, in what could prove to be an explosive mix for risk assets.
There is much at stake for Bitcoin bulls, even in this established range — the market has already teased a deeper correction, and traders are already marking levels that could come next.
These focus mainly on bid liquidity below $50,000 — an attractive zone for a longer-term market bottom. On shorter timeframes, however, BTC/USD seems more interested in clearing liquidity to the upside as the week begins.
Cointelegraph takes a look at the current state of play when it comes to BTC/USD performance.
BTC price: It’s all about $60,000
A weekly close that went almost unnoticed means that Bitcoin is still firmly in familiar territory as the week’s TradFi sessions get underway.
Data from Cointelegraph Markets Pro and TradingView shows a lack of volatility on BTC/USD into the end of the week.
Crucially, $60,000 has held since being reclaimed on May 3, and for some, this level marks the line in the sand for bulls.
Commenting on a chart uploaded to X, popular analyst Mark Cullen flagged a “bullish order block” of bidder interest just below $60,000.
“Bitcoin still holding above 60k and the down trend break,” he wrote.
“That blue OB is going to be the key in the short term, lose it & we revisit the lows & likely much lower. Hold and another leg to take liquidity above the highs at 64-67k is likely.”
Cullen added that this week’s macroeconomic data releases, specifically the Consumer Price Index (CPI) on May 14, should be pivotal for BTC price action.
As Cointelegraph reported, the $60,000 zone represents more than simply bids — key moving averages and other bull market support trendlines have converged there.
Popular trader Daan Crypto Trades noted the so-called “bull market support band” still buoying prices.
“Bounced exactly from the Bull market Support Band last week,” he told X followers over the weekend.
“So far during this and previous bull cycles, it has offered good support. Let's see how we do from here.”
The support band is formed of two exponential moving averages or EMAs.
The latest data from monitoring resource CoinGlass meanwhile shows that overnight into May 13, a new $65 million block of bids was placed at around $60,250.
A cloud of ask liquidity waiting in the wings above $62,000 is now getting cleared in what could be the next spot price battleground.
The day prior, fellow trader Skew said that he suspected “passive spot buying” being responsible for support nearer to $60,000 not seeing a test.
“Overall good spot bid depth $60K - $58K,” part of X comments added.
CPI hits as Fed’s Powell due to speak
All eyes are on macroeconomic developments in the U.S. this week as data prints come thick and fast.
CPI forms the highlight when it comes to the inflation debate and risk-asset hopes for interest rate cuts.
Prior to that, however, May 14 will see the Producer Price Index (PPI) print for April, along with a public speaking appearance from Fed Chair Powell.
Powell will discuss the economy during a moderated discussion with Klaas Knot, president of the Netherlands’ central bank, De Nederlandse Bank, at the annual general meeting of the Foreign Bankers’ Association in Amsterdam.
Markets have shown themselves to be highly sensitive to Powell’s tone when it comes to hints as to future policy moves.
The latest data from CME Group’s FedWatch Tool underscores sentiment — traders see barely any chance of a rate cut at the Fed’s next meeting in June, with the likelihood only increasing substantially in September.
“If CPI inflation rises again this week, it will mark the third STRAIGHT monthly increase,” trading resource The Kobeissi Letter commented alongside its weekly macro diary dates post on X, describing the upcoming few days as “very busy.”
Long-term holders halt 2024 BTC distribution
Seasoned Bitcoin hodlers are channeling the 2021 bull market, as seen through some on-chain data.
In a positive development, long-term holders (LTHs) are in the midst of boosting their BTC exposure after distributing to the market throughout 2024.
This is the conclusion of J. A. Maartunn, a contributor to on-chain analytics platform CryptoQuant.
Uploading some of his latest findings to X, he argued that just like in mid-2021, LTH entities are attempting to capture more of the BTC supply.
“They see the low price of bitcoin as an opportunity to accumulate coins cheaply, to then reintroduce them to the market during hype phases,” Maartunn explains in an accompanying analysis on CryptoQuant.
“Interestingly, a trend line can be drawn between the data points from 2018, 2021, and 2024. There's a cyclical trend occurring, as previously described, where long-term holders buy in bear markets and sell in bull markets. However, a broader and more enduring trend is also at play: despite this cyclical trend, an increasing share of bitcoin is steadily being held by long-term holders.”
As Cointelegraph reported, both Bitcoin and Ether (ETH) speculators, known as short-term holders or STHs, form another nearby support level, which has broadly endured throughout the current bull market.
Funding rates reset endures across crypto
Bitcoin and altcoin market observers may not need to wait much longer to see more varied conditions return.
The current picture across derivatives markets shows the extent of neutrality, which now characterizes crypto.
In particular, funding rates remain neutral regardless of near-term price moves — something which makes Bitcoin’s trip to all-time highs in March looks like a blip on the radar.
“Crypto Funding Rates now down at neutral levels for longer than they were overheated back in February/March,” Daan Crypto Trades noted about the phenomenon.
CoinGlass data shows a broad funding reset coming at the end of March.
“That's basically how it goes: Slow market, breakout, overheating, reset. Rinse & Repeat,” Daan Crypto Trades added.
“Fear and indecision”
While prices act within an established corridor, volatility is already apparent elsewhere in crypto.
Related: Bitcoin trades sideways while TON, RNDR, PEPE and AR flash bullish signs
The Crypto Fear and Greed Index, the classic market sentiment gauge, is flip-flopping between various states this month.
The lagging indicator uses a basket of factors to determine impulsive tendencies among crypto traders, with extreme readings suggestive that the market could see a knee-jerk reversal.
Fear & Greed is at 57/100 as of May 13 — a fairly neutral reading and a strong contrast to the 71/100 seen on May 6 — inches from the “extreme greed” zone.
In a new analysis on May 11, research firm Santiment likewise attributed a drop in Bitcoin on-chain activity to “fear and indecision” on the part of traders.
An accompanying chart revealed that an aggregate bag of on-chain actions had dropped to levels last seen in 2019.
“Bitcoin's onchain activity is approaching historic lows as traders have dramatically slowed transactions in the 2 months since its alltimehigh,” Santiment wrote.
“This isn't necessarily a sign of more $BTC dips, but rather a signal of crowd fear and indecision.”
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.