Bitcoin Navigates Market Volatility: Bullish Trend Supported by Strong US Economic Data
Summary:
Following the Wall Street market opening on May 16, Bitcoin's (BTC) value experienced a minor dip from $66,000, despite supportive U.S economic data bolstering bullishness in the crypto sphere. The previous day's 7.5% increase in BTC value appeared to stabilize with further support from favourable unemployment figures. On the X platform, prominent trader CrypNuevo identified a new liquidation cluster zone between $66k to $70k. However, Material Indicators co-founder Keith Alan cautioned that lower levels may need a retest to confirm a new phase of the broader Bitcoin bull run and suggested retesting the sub-$60,000 levels.
After the Wall Street market kickstarted on May 16, Bitcoin (BTC) experienced a slight decline from $66,000. However, encouraging economic data from the U.S. further strengthened the bullishness among crypto investors. According to information sourced from Cointelegraph Markets Pro and TradingView, bitcoin's pricing instability appeared to stabilize following a 7.5% increase the previous day.
This hike was primarily driven by the April announcement of the U.S. Consumer Price Index (CPI) and the Producer Price Index (PPI). When the CPI surpassed expectations, it triggered a rally across various risk assets. The trend continued on May 16 as the unemployment figures were favourable, with jobless claims reaching 222,000 instead of the anticipated 220,000.
As mentioned by Keith Alan, co-founder of Material Indicators, interpreting the PPI report could be difficult, but the Core Inflation metrics seemed straightforward. Positive data was being interpreted as positive news. Consequently, analysts speculated that BTC/USD was ready to tackle the considerable resistance below its all-time highs.
CrypNuevo, a well-known trader, noted in his content on the X platform that a liquidation cluster zone was emerging, ranging from $66k to $70k. The highest level of liquidations in this range was $69k. He suggested that there could initially be some consolidation or retracement, but ultimately this cluster would be the target. The CoinGlass resource was used to depict liquidity levels around the current pricing in an accompanying chart.
Taking a more conservative approach, Alan cautioned potential downsides, suggesting that lower levels may need to revisit to solidify the next stage of Bitcoin's general bull run. The first obstacle, as per Alan, was the 50-Day Moving average at $65.1k, just above the selling wall at $65k. He also pointed out the thin bid support down to the $60k - $61k range and the lack of a support retest near the local low of $56.5k or the previous two consolidation ranges.
According to Alan, retesting the sub-$60,000 levels could be a viable strategy to establish a firmer base for an upward push. He expressed his desire for a support test at the 21-Week Moving Average. His warning concluded with real-time instances, mentioning that technical resistance at $65k was being tested at the time of his statement. Now, it was to be seen if the bulls had enough drive to push this above the $69k mark. Nonetheless, investment decisions should be made cautiously, with thorough independent research and careful assessment of risks involved.
Published At
5/16/2024 6:08:47 PM
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