Bitcoin (BTC) returned above $26,000 on May 25 after an overnight dip offered a retest of recent lows.
BTC price action acts around key 200-week moving average
With little excitement present on spot markets, traders and analysts looked for potential volatility catalysts.
The day’s macroeconomic reports from the United States, which included gross domestic product estimates for Q2 and jobless claims, failed to shake up the status quo.
GDP comes in at 1.3%, while 1.1% forecasted.
Unemployment claims are also coming in more positive than expected at 229K, while 249K forecasted.
Economy is still ‘strong’.
— Michaël van de Poppe (@CryptoMichNL) May 25, 2023
“Bears failing to push price lower, as we retest that support area from below,” popular trader Jelle summarized in part of a Twitter update on the day.
He added that a reclaim of $26,600 would be the “ideal scenario,” which would act as a springboard for BTC/USD to reclaim its previous range.
Bears failing to push price lower, as we retest that support area from below.
All eyes on the daily close still, #Bitcoin needs to hold 26.3 in order for that daily bullish div to lock in.
Ideal scenario; reclaim 26.6 and back into the previous range.
— Jelle (@CryptoJelleNL) May 25, 2023
Fellow trader Crypto Tony repeated a popular downside target of around $25,000 should Bitcoin “nuke” lower.
Analyzing the brief trip below the $26,000 mark, trader Skew pinned the blame on Binance traders engineering a sweep.
“There’s your usual binance liquidity engineering pump & rug,” he reacted.
He subsequently explained prices rising thanks to limit buy orders being filled and order book liquidity improving.
Bearish outcome “slowly but surely” coming true
On weekly timeframes, meanwhile, trader and analyst Rekt Capital highlighted the significance of current spot price levels.
Just above $26,000, he noted, lies the 200-week moving average, and a breakdown to flip it back to resistance would spell long-term difficulties for bulls.
If #BTC loses the ~$26200 support (blue) then price would drop into the lower $20000s (green)
— Rekt Capital (@rektcapital) May 25, 2023
Further analysis warned that Bitcoin’s multi-month highs of $31,000 from April were, in fact, rapidly switching to favor the bears, fulfilling a head-and-shoulders pattern.
“So far, BTC has broken down from the Head & Shoulders. BTC has also recently flipped the Neckline of this pattern into new resistance (red box),” he commented alongside an explanatory chart.
“Slowly but surely, this bearish pattern is validating itself which could spell deeper downside into the low $20000s.”
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.