Key Points
- Bitcoin’s short-term outlook is bearish with a series of lower highs in the past month and a drop to $56.5k.
- Two dormant wallets selling BTC worth $60.9 million could potentially affect market participants.
Bitcoin [BTC] held onto the $60.7k support level over the weekend, however, a bearish expectation in the short-term was maintained.
A recent liquidity analysis hinted at where a price reversal might take place during this week’s price action.
Market Impact of Dormant Wallets
The market could potentially be impacted by news of two dormant wallets, which had been inactive for nearly 11 years, selling BTC worth $60.9 million. This report also pointed out a decrease in crucial on-chain Bitcoin metrics.
On the 1st of May, the range formation was decisively breached when Bitcoin fell sharply to $56.5k. Despite bouncing back to $65.5k a week later, the lower timeframe market structure remained bearish.
Bitcoin Price Prediction
The price prediction for Bitcoin suggests a drop to the $56k mark and potentially lower. Currently, it exhibits a steady downward momentum, as indicated by the RSI’s reading of 47.
The price has been forming lower highs since mid-April.
The 78.6% HTF Fibonacci retracement level at $55.5k might be revisited before the bottom is in. The future is uncertain, but traders and investors should be ready for this possibility.
For an asset to trend upward, capital inflow and bullish conviction are required. The Open Interest chart has been passive and unimpressive over the past week, mirroring Bitcoin’s struggle to form a trend.
However, the spot CVD started to rise, reclaiming a former short-term support level. This signals buying pressure in the spot markets. Furthermore, the past two days have seen short positions liquidated. This forced market buy orders of the liquidated position and, if the trend continues, could see Bitcoin bounce higher.
Please note that the information provided does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
