Bitcoin (BTC) is currently battling to maintain a bull trend as the new week begins. Despite closing the weekly candle below $27,000, BTC/USD is attempting to secure support within a critical trading zone. The previous week saw a flash dip below $26,000, and Bitcoin experienced two-month lows, which has made traders anxious about a potential bearish breakdown. Although this has not yet taken place, traders continue to remain nervous about both shorter and longer timeframes. The macroeconomic triggers for this week are relatively calm, implying that there is less chance of volatility from external sources. Additionally, the upcoming difficulty adjustment could result in further bullish momentum. This article identifies some significant factors affecting BTC’s price this week.
After achieving a weekly close at approximately $26,930, Bitcoin is already headed in the right direction, hitting $27,550 overnight. Although encouraging, the close is still the weakest for Bitcoin since mid-March. A Twitter analysis by popular trader and analyst Rekt Capital warns that $27,600 is the current level that needs to be converted to support. His perspective reinforces existing warnings from the previous weekend and adds to a small group of well-known analysts who are still considering the possibility of significant BTC price retracements. However, Rekt Capital sounded more optimistic overall, looking beyond the current correction.
Similarly, other analysts such as Michael van de Poppe and Moustache are bullish about Bitcoin and altcoins in the long-term. Van de Poppe tweeted that BTC/USD was “ready for continuation,” while Moustache suggested that the current weaker price movements were a result of Bitcoin and altcoins taking a “breather.”
This week could be calm in terms of macro triggers because, after several prior macro data prints, Federal Reserve Chair Jerome Powell is scheduled to give a speech on May 19. According to trading firm QCP Capital, USD strength is the most significant reason for BTC’s current market cap, which has led to the market blaming known bearish factors such as upcoming supply from the U.S. government and Mt. Gox.
BTC mining difficulty is set to reach all-time highs again after a slight retracement during its previous adjustment. This week, BTC’s difficulty is set to increase by around 2%, according to BTC.com. This trend has been unaffected by recent short-lived upheavals in fee markets.
Moreover, sentiment has seen a recent reset after reaching high levels of “greed.” The Crypto Fear & Greed Index shows that irrational exuberance has taken a significant hit due to recent cross-asset price come down, returning market sentiment to neutrality. As a result, traders are turning to stablecoins, and memecoins no longer seem to be in demand.