Key Points
- Bitcoin (BTC) maintains its $60,000 support level as market sentiment fluctuates between bullish and bearish.
- The United States macro data and Federal Reserve Chair Jerome Powell’s commentary could trigger crypto market volatility.
Bitcoin (BTC) enters a new week, successfully preserving its $60,000 support level. The market sentiment remains volatile, swinging between bullish and bearish.
BTC price action remains confined to a narrow trading range. This week, however, could witness a dramatic change in pace due to the potential volatility in the crypto market.
Market Volatility and BTC Performance
The United States macro data, combined with Jerome Powell’s commentary, the Chair of the Federal Reserve, could create a volatile mix for risk assets. Bitcoin bulls have a lot at stake, even within this established range. The market has already flirted with a deeper correction, and traders are marking levels that could be next.
Mainly, the focus is on bid liquidity below $50,000 — a desirable zone for a longer-term market bottom. However, on shorter timeframes, BTC/USD seems more interested in clearing liquidity to the upside as the week begins.
Bitcoin’s $60,000 Support Level
A weekly close, which went almost unnoticed, means that Bitcoin remains firmly in familiar territory as the week’s traditional finance sessions begin. Crucially, $60,000 has held since being reclaimed on May 3, marking the line in the sand for bulls.
This week’s macroeconomic data releases, specifically the Consumer Price Index (CPI) on May 14, should be pivotal for BTC price action. As reported, the $60,000 zone represents more than just bids — key moving averages and other bull market support trendlines have converged there.
The so-called “bull market support band” continues to buoy the price. The support band is formed of two exponential moving averages, or EMAs. The latest data shows that overnight into May 13, a new $65 million block of bids was placed at around $60,250. A cloud of ask liquidity which was waiting in the wings above $62,000, meanwhile, is now getting cleared in what could be the next spot price battleground.
Macroeconomic Developments and BTC Distribution
All eyes are on macroeconomic developments in the U.S. this week as data prints come thick and fast. CPI forms the highlight when it comes to the inflation debate and risk-asset hopes for interest rate cuts.
May 14 will see the Producer Price Index (PPI) print for April, along with a public speaking appearance from Fed Chair Powell. Powell will discuss the economy during a moderated discussion with Klaas Knot, president of the Netherlands’ central bank, at the annual general meeting of the Foreign Bankers’ Association in Amsterdam.
Markets have shown themselves to be highly sensitive to Powell’s tone when it comes to hints as to future policy moves. The latest data underscores sentiment — traders see barely any chance of a rate cut at the Fed’s next meeting in June, with the likelihood only increasing substantially in September.
Long-term Bitcoin hodlers are channeling the 2021 bull market, as seen through some on-chain data. In a positive development, long-term holders (LTHs) are in the midst of boosting their BTC exposure after distributing to the market throughout 2024.
Market Conditions and Sentiment
Bitcoin and altcoin market observers may not need to wait much longer to see more varied conditions return. The current picture across derivatives markets shows the extent of neutrality, which now characterizes crypto.
In particular, funding rates remain neutral regardless of near-term price moves — something which makes Bitcoin’s trip to all-time highs in March look like a blip on the radar.
While prices act within an established corridor, volatility is already apparent elsewhere in crypto. The Crypto Fear & Greed Index, the classic market sentiment gauge, is flip-flopping between various states this month. The lagging indicator uses a basket of factors to determine impulsive tendencies among crypto traders, with extreme readings suggestive that the market could see a knee-jerk reversal.
Fear & Greed is at 57/100 as of May 13 — a fairly neutral reading and a strong contrast to the 71/100 seen on May 6 — inches from the “extreme greed” zone. In new analysis last week, research firm Santiment likewise attributed a drop in Bitcoin on-chain activity to “fear and indecision” on the part of traders.
