06 May

Bitcoin's price briefly surged above $65,000 today, marking a notable uptick. However, analysts caution against interpreting this as the start of a new bull market in the short term.

Last week, Bitcoin experienced volatility, dipping below $57,000 before swiftly rebounding above $58,000 within 24 hours and surpassing $60,000 within 48 hours. By Friday, it had climbed above $63,000, reaching over $64,000 the next day.

Despite this rapid ascent, which amounted to a 13% increase in just a few days, many analysts remain cautious about declaring a return to a bull market.

The period of consolidation

Bitcoin's price journey since reaching its all-time high of $73,800 on March 14th has been marked by three subsequent drops. Despite briefly rebounding above $70,000 after the initial drop in late March, Bitcoin faced another significant decline in mid-April, struggling to surpass $67,000 since then.

The third drop, occurring days after the halving on April 20th, seemed to find support just below $57,000 by May 1st. However, the subsequent return to $65,000 has not convinced analysts that the post-halving retracement is over.

Notably, a robust resistance zone between $59,000 and $57,000 has emerged, leading many analysts to believe that Bitcoin's price is unlikely to drop below these levels for an extended period. Consequently, there is speculation that Bitcoin may enter a prolonged period of sideways movement, potentially lasting for several weeks, if this support zone holds.

Bitcoin Price: Bitget’s analysis on the possibility of a bull market?

According to Bitget analyst Ryan Lee, Bitcoin's price is likely to range between $58,000 and $72,000 for the next one or two months. This prediction is based on the historical trading patterns of Bitcoin, as before its unprecedented jump above $70,000 in March 2024, it traded sideways around $50,000 in February.

Some analysts anticipate a potential return to the $50,000 to $53,000 range, but breaking the platform formed below $59,000 over the past two months would be necessary for this scenario to unfold.

Lee also highlights the significant decrease in implied volatility for both BTC and ETH over the last month, suggesting that traders anticipate limited volatility in the short-term market. Additionally, recent outflows from Bitcoin ETFs indicate short-term profit-taking rather than signaling the beginning of a new bull run.

However, GBTC has recently experienced its first net inflow since becoming an ETF, indicating a temporary easing of short-term selling pressure on the market.
Lee also emphasizes that there is notable support for Bitcoin's price at levels lower than its current value.

The situation on the markets

Lee also highlights a decrease in the Fed’s Net Liquidity Index and a slowdown in the overall growth of stablecoin market capitalization. These indicators confirm the correction in the crypto market over the past month, but there are signs suggesting a potential shift in the medium term.

According to Lee, the Fed is contemplating a path of interest rate cuts due to decreasing inflation, rising unemployment rates to 4.5%, and liquidity-related risks discussed during the rate meeting. While the market currently anticipates only one interest rate cut by the Fed this year, the crypto market might anticipate an earlier and broader rate cut starting as soon as September or November.

Based on this analysis, Lee suggests that the next peak of the Bitcoin bull market could occur around September. He identifies key sectors that could undergo significant changes, including the BTC ecosystem with new protocols and assets like Rune and ARC20, as well as memecoins and the AI sector.

May 2024, Cryptoniteuae

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