$46,000 is on the cards for a bullish uptick, but concerns about lack of buyer support below $30,000 are a real threat for analysts.
Bitcoin (BTC) is working to flip $40,000 to support after a record $10,000 bounce in four hours on May 19 — what are the price levels to watch?
After its stunning recovery from $30,000 lows, BTC/USD has held onto its gains, practically erasing the previous day’s carnage.
$46,000: Old support flips to resistance
With spot price still well below expectations, however, analysts are keenly eyeing possible resistance levels — as well as support should a fresh dip take hold of the market.
Bullish signs are everywhere at the time of writing. Funding rates are deeply negative, outflows from exchanges reached sky-high levels in the past 24 hours and leveraged traders have been effectively washed out of the market with $8 billion in liquidations.
Now, attention is turning to two price levels in particular, with these marking a likely floor and ceiling, respectively.
First is $46,000, around $6,000 or 15% above spot price. As noted by on-chain monitoring resource Whalemap, this former support level is apt to act as resistance should Bitcoin see a further impulse move on short timeframes.
$46,000 is also where the significant 20-week weighted moving average (WMA) currently lies. Traditionally during bull runs, weekly candles stay above the rising 20WMA, and a violation of the trend could yet be a bad omen.
“In terms of TA, 33k looks like a support,” Whalemap explained alongside charts.
“A very similar set up can be observed at 46k which is shown below. Previous support at 46 should also be resistance if we bounce from 33.”
While those comments were made before the capitulatory move to $30,000, the appetite for selling remains closer to $50,000 and beyond.
The $19,000 vacuum
On the flipside, Whalemap warns, a comparative lack of buyer support below Wednesday’s lows could potentially open up a path to a further capitulation run as low as $19,000.
“We need to hold 29k,” the Whalemap team told Cointelegraph.
“Otherwise there is a large gap in supports up until 19k. This means buying 29k–>33k prices is a great risk/reward trade.”
Momentary spikes in spot price on exchanges suggested that large trades to the upside were being entered at levels around $40,000 overnight.
“If you buy something because price went up, you will sell as soon as price stops going up or goes down… If you buy something because you believed current price was below fair value or future growth would increase value, when price falls you will buy more…,” Mark Yusko, founder, CEO and CIO of Morgan Creek Capital Management, told Twitter followers overnight.
“Remember on days like today, there is always a latter buying from the former…”
The volume of stablecoins flowing into exchanges stands as testimony to the level of interest in acquiring cryptocurrency in the $30,000. According to data from CryptoQuant, this has reached a new all-time high.