empty
17.05.2023 11:28 AM
Bitcoin moves to retest $26.6k amid falling trading activity

By the middle of May, we can confidently say that the phrase "sell in May and go away" has fully justified itself. Throughout the month, we've been observing a downward corrective movement of BTC, and during pauses, consolidation and local price pullbacks of the cryptocurrency.

This image is no longer relevant

We've seen a clear withdrawal of liquidity below the $26.6k level, which was mentioned earlier. We've also witnessed the price return above the $26.6k support zone, which is a bullish signal. However, a combination of fundamental and technical factors suggest that the structure of the upward trend could be disrupted soon.

Fundamental Factors

Another series of the saga with the global economy's recession has come to its conclusion. According to a BofA survey, market players anticipate a soft landing of the global economy in the next 12 months. The majority of respondents believe that a recession in the U.S. can be avoided, which was a positive signal for investors.

This image is no longer relevant

Meanwhile, pessimistic sentiments continue to dominate within the crypto market, accompanied by a gradual decrease in trading activity. It is reported that May 2023 may become the worst month in terms of trading volumes on centralized exchanges since October 2020.

This image is no longer relevant

The average commission sizes in the Bitcoin network have also returned to optimal values. On one hand, this confirms the low trading activity and interest in the cryptocurrency. On the other hand, it will allow reducing the cost of mining BTC, leading to more active actions from miners.

This image is no longer relevant

Trading volumes and network activity in the Bitcoin market have also dropped to yearly lows. All these facts indicate a significant decrease in investment activity and bearish sentiment regarding Bitcoin. However, in the near future, several events might occur that could change the balance of power in the crypto market.

A Volatile End to the Week

Tomorrow, global markets are expecting important economic statistics on the U.S. labor market. Recently, employment in the United States has begun to decline due to a worsening liquidity situation. If the number of unemployed continues to grow, it's quite possible that the Federal Reserve will adjust its policy, and we might expect a rate cut as early as this summer.

This image is no longer relevant

We will learn about these and other plans of the Federal Reserve on Friday, when officials will share their thoughts on the current economic situation. First and foremost, the markets will be awaiting the department's further plans regarding the key rate. These events will trigger a volatility spike and may provoke sharp price movements in BTC.

BTC/USD Analysis

Meanwhile, Bitcoin has definitively completed the process of withdrawing liquidity below $26.6k. The asset made a sharp leap below $26k and swept all the supply in one go, after which it rebounded. Currently, there is a consolidation phase happening under the influence of bears, which is causing a price decline.

This image is no longer relevant

Bulls are not allowed above $27.8k, while sellers continue their attempts to break the $26.6k level, which, at this stage, acts as a key support zone. As of May 17, the situation is under control, but there is a possibility of a bearish breakthrough at the $26.6k level. This event could significantly strengthen the bears' position and lead to further decline.

This image is no longer relevant

With further decline, the structure of the upward trend is threatened, which originates near the $24.6k–$25k area. As of 08:00 UTC, technical metrics are flat, which is typical for periods of low trading and network activity. Therefore, the $26.6k support level is still standing, but the situation can change.

Conclusions

The main task for buyers this week will be to hold the $26.6k level. The level has held despite the pressure from sellers, but volatility spikes in the next few days could change the situation. Considering this, the $26.6k level is crucial for determining the future prospects of Bitcoin.

Artem Petrenko,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

Crypto investors still overwhelmed by optimism

Despite the ongoing correction, investor sentiment toward buying crypto assets remains positive, as indicated by the so-called Fear & Greed Index, which, as we noted earlier, is still

Jurij Tolin 16:24 2025-05-30 UTC+2

Do you know the most profitable company in the crypto industry?

While Bitcoin and Ethereum saw a fairly solid correction toward the end of the week, the most profitable company in the crypto industry — Tether — may have been quietly

Jakub Novak 16:16 2025-05-30 UTC+2

Trading Recommendations for the Cryptocurrency Market on May 30

Bitcoin and Ethereum continued their corrections, falling significantly throughout yesterday. The decline extended into today's Asian session, with Bitcoin updating its price to $104,500 and Ethereum testing $2,560. Thus

Miroslaw Bawulski 09:29 2025-05-30 UTC+2

Trading tips on crypto market for May 29 (North American session)

Bitcoin has shown a fairly solid rebound, climbing back above the $108,000 mark and breaking through $109,000. The chart below highlights a morning breakout through the $108,100 level. Statistics confirm

Miroslaw Bawulski 15:46 2025-05-29 UTC+2

Bitcoin recovers to $109,000

Bitcoin quickly rebounded to the $109,000 mark today. This rapid surge, especially following yesterday's dip to around $106,600, once again highlights the strong interest from large players who take advantage

Jakub Novak 15:04 2025-05-29 UTC+2

Bitcoin demand shows no signs of fading

Bitcoin demand has shown resilience once again. After a brief dip below the $107,000 mark, the decline was swiftly bought up, demonstrating that buyers remain active and confident

Jakub Novak 13:38 2025-05-29 UTC+2

Trading Recommendations for the Cryptocurrency Market on May 29

Bitcoin is starting a correction, and Ethereum is showing signs of strength. Yesterday, Bitcoin dipped to around $107,000 before rebounding sharply — a sign that many traders are cautious about

Miroslaw Bawulski 08:56 2025-05-29 UTC+2

Bitcoin Emerges from Wall Street's Shadow: Why the Coming Months Could Be Pivotal for the Crypto Market

The announcement that Cantor Fitzgerald, one of the largest U.S. primary dealers, is launching Bitcoin-backed lending has reshaped the crypto market. Managing $2 billion in capital for this venture

Ekaterina Kiseleva 00:31 2025-05-29 UTC+2

Trading Recommendations for the Cryptocurrency Market on May 28

Bitcoin failed to hold above the $110,000 level, while Ethereum again showed decent growth, fueled by news of a possible significant increase in the gas limit per block

Miroslaw Bawulski 10:04 2025-05-28 UTC+2

Bitcoin Remains Within a Range Conducive to Growth

Yesterday, Bitcoin and Ethereum continued to attract demand from traders and investors, maintaining strong prospects for the continuation of the bullish market. Meanwhile, the International Monetary Fund (IMF) stated that

Jakub Novak 09:36 2025-05-28 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.