- Bitcoin’s high timeframe (HTF) outlook remains bullish, despite the potential for a deeper retracement.
- Exchange-Traded Fund (ETF) inflows provided a temporary boost, but Bitcoin’s downtrend appears to continue.
- Decreasing accumulation of Bitcoin could lead to further depreciation due to decreased demand.
Bitcoin’s bullish outlook is challenged as the cryptocurrency faces a potential deeper retracement, despite temporary buoyancy from ETF inflows.
Bitcoin’s Downtrend Continues Despite Bullish Spirits
Bitcoin [BTC] exhibited bearish tendencies on lower timeframe price charts after peaking at $65.5k at the start of the week on Monday, May 6th. The $63.3k support level succumbed to selling pressure and was converted to resistance on May 7th. Reports of a decrease in BTC accumulation could lead to further depreciation due to a lack of demand. Despite promising inflows on Monday, Bitcoin’s outlook remains bearish.
Bitcoin’s $62.1k Level Falters as Downtrend Strengthens
Bitcoin was previously trading within a range with lows at $59.7k. Price action on May 1st breached this level, and the $65k region was retested as resistance, indicating a bearish market structure. The Relative Strength Index (RSI) on the daily timeframe also dropped below the neutral 50, signaling bearish momentum. However, the On-Balance Volume (OBV) surpassed a local resistance level and continued to defend it at the time of writing. Despite this, it is likely that Bitcoin will slump toward the $55k low or further downward in the coming weeks as selling pressure intensifies and liquidity to the south could draw prices lower.
Why Bitcoin Cannot Bullishly Reverse Instantly
After a strong trend, prices need time to consolidate. By breaking below the range low at $59.7k, Bitcoin suggests that the consolidation phase is not yet upon us and that the downtrend continues. The liquidity pockets at $56k and $51.5k are the next attractive zones for Bitcoin. To the north, the $68.5k-$70k region presents an interesting point for a bearish reversal. Given the technical factors, a move southward appears more likely.
Conclusion
Despite a temporary boost from ETF inflows, Bitcoin’s bearish trend continues. Decreasing accumulation could lead to further depreciation, and technical indicators suggest a move southward is more likely. Investors should remain cautious and monitor market developments closely.
