Bitcoin (BTC) is maintaining its support at $60,000 as market sentiment remains neutral. Despite the lack of volatility, there are potential catalysts that could lead to a significant shift in BTC price action. This week, the United States macro data and comments from Jerome Powell, the chair of the Federal Reserve, could create an explosive mix for risk assets.
Bitcoin bulls have a lot at stake, even within the current trading range. The market has already hinted at a deeper correction, and traders are preparing for potential levels that could come next. One focus is on bid liquidity below $50,000, which is seen as an attractive zone for a longer-term market bottom. However, in the short term, BTC/USD seems more interested in clearing liquidity to the upside.
The current state of BTC/USD performance shows that $60,000 is a crucial level. It has held since being reclaimed on May 3 and is considered a line in the sand for bulls. Analysts have identified a “bullish order block” just below $60,000, indicating significant bidder interest in that area. Additionally, key moving averages and other bull market support trendlines have converged around the $60,000 zone.
The support band formed by two exponential moving averages is also providing buoyancy to BTC prices. Recent data shows that a new block of bids worth $65 million was placed at around $60,250, while ask liquidity above $62,000 is being cleared.
This week, all eyes are on macroeconomic developments in the U.S., particularly the Consumer Price Index (CPI) on May 14. The inflation debate and hopes for interest rate cuts are hinging on the CPI data. Federal Reserve Chair Powell is also scheduled to speak about the economy, and his comments are expected to influence market sentiment and future policy moves.
Long-term Bitcoin holders (LTHs) are currently increasing their BTC exposure after distributing to the market throughout 2024. This trend is reminiscent of the 2021 bull market, where LTH entities accumulated coins during low-price periods to reintroduce them to the market during hype phases.
In the derivatives market, funding rates remain neutral regardless of near-term price movements. This suggests that the current neutral conditions in the crypto market could soon give way to more varied conditions. The Crypto Fear and Greed Index, which measures market sentiment, is currently at a fairly neutral reading of 57/100, indicating a lack of extreme greed or fear among traders.
Overall, while Bitcoin is experiencing a period of low volatility, there are potential catalysts that could lead to a significant shift in price action. Traders are closely watching macroeconomic data and the comments of Federal Reserve Chair Powell for clues about the future direction of BTC.