Bitcoin (BTC) tested $27,000 on May 31 as weakness prevailed into the monthly close.
Analyst: Bitcoin reaching “crucial area”
Data from Cointelegraph Markets Pro and TradingView followed BTC/USD as it continued to lose momentum after local highs near $28,500.
As early-week excitement faded, traders and analysts warned that now was a make-or-break point for the short-term trend.
“Crucial area approaching here for Bitcoin and dipped into it,” Michaël van de Poppe, founder and CEO of trading firm Eight, summarized.
“If this zone sustains as support & Bitcoin will be able to reclaim $27,500, everything looks like we’ll continue the upwards trend. Drop beneath $26,600 and we’ll see new lows.”
Trader Skew added that spot buy liquidity on the largest global exchange, Binance, had been taken, with a reversal now required to avoid a retest of the 200-week moving average (MA).
This had functioned as earlier support at just above $26,000.
$BTC Binance Spot
and walls filled now lolstrength is what you want to see now else straight back to 200W MA https://t.co/u930TJ1E9V pic.twitter.com/D2XsU6mrk8
— Skew ? (@52kskew) May 31, 2023
Skew further commented that BTC/USD was testing several exponential MAs on the day in a “pretty important” performance.
Continuing on the Binance order book, monitoring resource Material Indicators had some predictions for how the monthly close could play out.
“For the most part, Bitcoin liquidity changes in the order book have been pretty subtle today, but by zooming out a little wider we can see ask liquid from the $31k – $32k range is dropping in closer to the active trading zone while bid liquidity has been laddered down, then adjusted slightly,” it told Twitter followers.
“Liquidity consolidating into the range should dampen volatility heading into the monthly close. The bigger concern for bulls is that bid liquidity is thinning out.”
Liquidity ready to fuel Bitcoin fire
Offering some hope in the event of upside returning, popular analyst Philip Swift noted liquidity lying in wait above $30,000.
Related: Mining difficulty passes 50 trillion — 5 things to know in Bitcoin this week
Swift, creator of on-chain analytics site LookIntoBitcoin and co-founder of trading suite DecenTrader, suggested that any breakout could gain “momentum” and potentially head to $35,000.
“*IF* Bitcoin can get up to $31k (it would have to overcome weekly resistance @$30k) there is a big amount of liquidity between $31k – $35k which could add some momentum to the move,” he commented.
An accompanying chart showed Decentrader’s Liquidity Map tool.
Magazine: AI Eye: 25K traders bet on ChatGPT’s stock picks, AI sucks at dice throws, and more
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.