The price of Bitcoin (BTC) is challenging its already known but significant all-time highs at the start of a new week: it hit $ 58,000 May 3.
After a surprising rebound on Friday, The largest cryptocurrency saw a slow decline for much of the weekend. However, this changed overnight on Sunday, and now BTC / USD is fighting resistance again near $ 60,000.
Cointelegraph looks at what the next few days might have in store for Bitcoin price action – there are five factors that could help shape it.
Bitcoin ignores DXY gains
With several of the major markets closed for the May holidays, there are fewer signals than usual from commodities and equities.
Asian stocks posted losses, driven by various problems, such as the current Indian debacle in the Covid-19 case. At the same time, In the US, S&P 500 futures are already making up ground lost on Friday.
Unlike Bitcoin, Markets did not react well to rumors that some banks might cut fiscal support measures on the virus, which was a key element in the S & P’s record performance in the past year.
However, the US dollar money index (DXY) posted impressive gains after a month of declines.
As Cointelegraph reported, DXY and Bitcoin tend to be inversely correlated, but last Friday proved to be another notable exception.. BTC / USD rose conspicuously on the day, passing $ 58,300 before turning back.
A key issue remains inflation: Senior US officials believe the trillions of dollars in virtual stimuli will have little impact on it, while others disagree.
The cash hike enters the next phase
Another day, another impressive comeback for Bitcoin.
Just a week after recovering from its slide to near $ 46,000, the price of BTC is recovering its gains from the end of last week.
While the weekend was for the most part mediocre, Monday is seeing the kind of “buying frenzy” that Warren Buffett has been seeing in traditional markets.
At the time of writing this article, the price of BTC / USD has surpassed $ 58,300 – a February all-time high – and is now still climbing, approaching $ 59,000.
A look at the buy and sell demand of the large exchange Binance’s order book shows that Resistance remains strong at the $ 60,000 mark and above, and the bullish momentum will have to break down several walls of sell orders to break past the current all-time high of $ 64,500. Another major barrier is now at $ 68,000.
Looking at the support, the outlook is less robust: $ 52,000 is the first solid level among traders, followed by $ 50,000 and $ 48,000.
Nevertheless, appetite for bitcoin could be seeing a new bullish phase as stablecoin balances on exchanges fill up. Faced with the huge “impression” of these assets, This trend increases the prospects for significant buyer demand to materialize, which would help drive spot price action.
“Stablecoins are making a comeback on the markets. You know what that means“, summarized analyst Jan Wuestenfeld.
Buying “genuine” among spot traders markedly boosted earnings on Friday, while leveraged trading declined.
A cat and mouse game with Ethereum
Another theory focuses on that Bitcoin is simply playing catch-up with a red-hot altcoin scene, led by Ether (ETH).
The performance has defied expectations: the ETH / USD pair is now above $ 3,000; its price gained 28% in the last week, compared to 11% for Bitcoin.
That, unsurprisingly, further defined Bitcoin’s market capitalization dominance – this one is now at 47.7%., which is its lowest point since July 2018.
“I wouldn’t be surprised if we see ETH hit $ 3,500 this week“, forecast popular Twitter trader Crypto Chase, along with more hikes against Bitcoin.
“The price of the ETH / USD pair is rising from its bullish consolidation leg, and ETH / BTC still has room to move up (it is currently at $ 0.053, its resistance is at $ 0.058).”
The chain monitoring resource glassnode saw force in the decline of the Network Value to Transaction Ratio (NVT) on Ethereum; this corresponds to the volume of organic trade that fuels price gains.
“As the price of ETH surpasses $ 3,000, setting a new all-time high, the NVT ratio drops again towards the lows of this cycle“, commented the company in an attached graphic.
“Low NVT ratios indicate that transaction volumes are high and growing faster than the market capitalization of the network. The strength of the market today is supported by the volume settled in the chain. “
Fundamentals make the hash crash disappear
The fundamentals of the Bitcoin network are still playing catch-up after seeing something of a “reboot” in recent weeks.
This came first in the form of a brief drop in the hash rate due to the flooding in China.. The difficulty of the Bitcoin network began to hint at a dip to accommodate the loss of participants.
As the difficulty adjusts every two weeks, it took until May 1 to take effect in real terms. The resulting 12% drop was the largest since November.
However, with this out of the way, the door is open for the mining hash rate to increase again in competition and the difficulty to have positive adjustments again, not negative. It is still early: current estimates still foresee another drop, this time of around -7%.
The hash rate has yet to recover from its previous drop – hovering around 161 exahashes per second (EH / s). Its maximum, according to the monitoring resource MiningPoolStats, was 168 EH / s.
Greed returns to the market
With the new earnings comes a familiar change in sentiment, and market participants are getting greedy.
That’s what the popular Cryptocurrency Fear and Greed Index shows, which on Monday is back in “greed” territory. after having doubled since the end of last week.
The index uses a basket of factors to create a normalized score between 0 and 100 for the degree of greed or fear of the cryptocurrency markets on a given day.
With a value of 61/100, the index score can still go up: “extreme greed” has not yet arrived.