Bitcoin is changing hands at $65K currently and this is just below the daily pivot ($65,948). It’s only a couple hundred dollars, but it shifts the immediate bias from the neutral category to slightly negative. More notably, the recovery from the May low took a pause almost exactly at the May 61.8 Fibonacci retracement level of the move from the $78,100 high to the $59,109 low ($66,363) and then turned lower. This is a clean level and was followed up with a clean rejection.
Can be termed as conviction without the confirmation
There is an important detail from this largest cryptocurrency that needs some attention. People who have been holding their coins for more than two years seem to have almost completely stopped selling. So far this year, up to June 6, only 218,421 BTC have changed hands, significantly less than previous cycles.
Also, in addition to this, the percentage of the circulating supply in long-term hands has just hit a record high 79 percent. The group that stayed dedicated during the worst of the dips is selling almost the least they ever have, even as the price of Bitcoin keeps getting rejected at an important level. This scenario can be termed as the comparison of Impatience versus a supply wall.
What do the momentum indicators depict?
Momentum oscillators and moving average stacks are in alignment. The MACD histogram turned positive but the line is deep in negative territory at -2,584, and is recovering from the hole and the key point to note here is that it is not signalling a new trend.
Considering the RSI metric, RSI14 is standing at 41.85 and RSI21 is showing up a reading of 40.53 which is still on the bearish side of neutral; only the 7-day is showing near-term strength at 52.75.
This digital asset’s price is under SMA30 ($69,524), EMA30 ($68,359), SMA200 ($77,394), and EMA200 ($79,170). Every medium- and long-term MA is still trending lower and SMA200 has dipped more quickly due to its extreme weighting on the recent drop in comparison to EMA200.
The importance of unmitigated zone
The May zone from $72,000 to $74,500 is still sitting above the present price and remains unmitigated. It was the area that the buyers and sellers challenged each other last time when the price was dropped. It will be the first realistic target if the price bounce moves beyond mere correction. A figure close to $70,571 will align perfectly with the 38.2 percent retracement level of $70,845 and this is an area that is likely to be tested before others. The mark of $79,170 is the true resistance and the value at the 200-day EMA which is still too far.
Below $63,173 and the $59,109 swing low, demand will be tested on the next round if $64,000 fails. A clean breakthrough of the May zone is expected to be looking towards $83,266 but that is a more distant bet worth observing, nothing more. The Fed announces its rate decision Wednesday, the first one under Kevin Warsh. Rates are expected to hold, but the real concern is whether the committee drops its easing bias as inflation runs stickier than hoped. A hawkish tone would create more pressure on risk assets broadly, and Bitcoin is likely to face the impact as well.
Kevin Warsh hasn’t set a tone
Spot ETF flows are muted but have some substance. As per the data provided by Sosovalue, on Tuesday U.S. BTC spot ETFs recorded $10.06 million of inflows and it is the first positive day since Monday’s $64.09 million outflow and multiple weeks of outflows leading up to this. One day of positive flow should not be considered a trend but signals an end to escalating outflow pressure, which has been bearish for prices since late May.
The positioning completes the picture. Anyone who bought around $66,800 is at a loss, looking very carefully at $65,000 and is most likely to sell it if the level doesn’t hold strong. Long-term holders aren’t even in that position. Their game is longer, and holding through Fed week means more than any chart.
Whoever is overconfident here assumed the bounce from the levels down from $59k was a trend reversal, not a retracement that still needs to break $66,363. Holders aren’t staying given that the chart looks better; they had no purpose for selling before the Fed decision. $64k and $66,363 in support need a second look shortly. If the largest cryptocurrency breaks, then it is highly possible that the $63,173 level will get targeted.
