Bitcoin Hits May High at $64,522 Amid Market Recovery Signs and Liquidity Concerns
Summary:
On May 4, Bitcoin (BTC) reached a May record of $64,522, spurred by positive US employment data and indications of cryptocurrency market recovery. However, traders remain cautious of the market's stability, particularly over the weekend, and concerns over a potential correction due to weak liquidity are prevalent. Analysts suggest conditions may favor shorting BTC below the "main resistance" of about $69,000, but also show interest in long BTC positions during dips below $56,000.
On May 4, Bitcoin (BTC) saw a surge that led to a value of $64,500, brought on by notable gains in trading outside typical working hours. Data from Cointelegraph Markets Pro and TradingView provided evidence of a new record high value of $64,522 on Bitstamp for May. This growth, spawned from positive response to US employment data, was fortified with several promising signs of recovery in the cryptocurrency market, including the Grayscale Bitcoin Trust's (GBTC) first inflow in almost a quarter of a year. At the time of reporting, BTC/USD rose by 5% on a month-to-date basis according to CoinGlass, marking a stark contrast to a 15% loss noted in April.
Well-known trader Daan Crypto Trades commented positively on the recent market momentum, but cautioned against premature trading during the weekend, thereby advocating patience to see how trends evolve. A clear discrepancy was depicted between the most recent CME Group Bitcoin futures closing price and a chart accompanying Daan's commentary, suggesting a 'gap' that BTC/USD tends to fill over time.
While the weekend's improvement was significant, some expressed concerns relating to overall market robustness, particularly without participation from traditional finance (TradFi). Keith Alan, a co-founder of trading platform Material Indicators, warned of a potential impending correction due to low order book liquidity. He advised on keeping an eye out for bid liquidity rejuvenation to uphold the on-going rally, adding that, without it, new losses could be on the horizon.
Sharing his insights, established trader and critic Credible Crypto suggested the market conditions might favor shorting BTC below the main resistance of around $69,000. He proposed two potential outcomes for the current BTC price trends, based on a chart he uploaded. He stated that holding the reclaimed local highs would be ideal, allowing traders to short various altcoins, whereas a failure in holding this reclaim could lead to an early downtrend, resulting in potential altcoin shorts going unfulfilled.
During particularly low BTC/USD values below $56,000, Credible Crypto hinted at the potential attraction of long BTC positions. However, it's important to note that every investment or trading move carries risk, and individual research is necessary before making any decision.
Published At
5/4/2024 5:11:35 PM
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